TAJIKISTAN'S HASAN ASADULLOZODA - MAN, MYTH, LEGEND

UNCLAS SECTION 01 OF 02 DUSHANBE 000829 SIPDIS SENSITIVE DEPT FOR SCA/CEN E.O. 12958: N/A TAGS: PREL PGOV ETRD EINV ECON TI SUBJECT: TAJIKISTAN'S HASAN ASADULLOZODA - MAN, MYTH, LEGEND REF: (A) DUSHANBE 635 (B) DUSHANBE 515 ¶1. (SBU) Summary: Hasan Asadullozoda (formerly known as Sadulloev), the 40 year old brother-in-law of President Rahmon, is Tajikistan's top business figure, and is often called the "third most powerful" man in the country (after Rahmon and Dushanbe mayor Ubaidulloyev). He controls or has substantial influence in major state-owned enterprises, and his holding company, Ismoili Somoni Financial and Industrial Group, manages two dozen companies involved in every major business sector. His wealth and influence, however, have generated jealousy among President Rahmon's inner circle, particularly his children. End Summary. Rise to Power -------------- ¶2. (U) Asadullozoda came from humble beginnings, but quickly ascended to the top of the Tajik business world. Most attribute his success to the fact that his older sister, Azizamoh, is married to President Rahmon. Born in the Kolhozabad district of Khatlon region in 1968, Asadullozoda was a gas station attendant in Kurgonteppa in ¶1991. Benefiting from his brother-in-law's rise to power in 1992, he was named Deputy Director of the oil depot in Kolhozabad in 1995. In 1997, he was promoted to Director of the oil depot in Jilikul, and by 1998, he was the General Director of an oil supply and logistics enterprise in Sarband. In 2001, he was appointed as the General Director of the Universal Commodity Exchange in Dushanbe. ¶3. (U) In May 2003, Asadullozoda became Chairman of the Executive Board of Orien Bank. Although Orien was -- and still is -- a private bank, it is closely aligned with President Rahmon. Asadullozoda was installed after the authorities arrested the previous chairman, Samihon Kurbanov. The finances, ownership, and business practices of Orien Bank are murky, so it difficult to determine Asadullozoda's exact ownership stake. Nevertheless, he uses his position as the bank's Chairman to support his other business interests. A Diversified Portfolio -------------- ¶4. (SBU) Asadullozoda is widely believed to control a significant portion of Tajikistan's economy. Through his Ismoili Somoni Financial and Industrial Group, founded in 1997, he has interests in the following sectors: -Cotton (30,000 hectares of cotton farms in Khatlon region; estimated revenues in 2003: $100 million; -Food Services (reported control of Vastan Restaurant and the Soyuz Company, a catering and alcohol importing business); -Hotels (the five-star Ismoili Somoni Hotel, located on prime real estate on Rudaki Avenue in Dushanbe, should be completed in 2009); -Insurance (Orien Insurance Company, founded in 2004, is the largest in the country with estimated revenues of $35 million); -Commercial banking (Orien Bank is the country's largest private bank, with approximately $65 million in capital; its $169 million loan portfolio has led to questions about many of the banks transactions); -Investment Banking (Somon Capital, founded in 2006 as a joint venture between Orien Bank and Visor Capital from Kazakhstan, is the first investment bank in Tajikistan); -Aviation (partial ownership of the company that runs the Khujand Airport; full ownership of SomonAir, the country's first private airline); -Media (Orien Media LLC operates a radio station, a television station, and a newspaper); -Telecom (Asadullozoda's TACOM LLC acquired the bankrupt Tajik Tel Company, Tajikistan's first cellular company, and has entered into a QCompany, Tajikistan's first cellular company, and has entered into a joint company with Russia's Vimpelcom under the Beeline brand; he has partial ownership of Arzon Mobile, an authorized distributor of Nokia and Samsung cell phones); -Aluminium (Asadullozoda's CDH International buys and sells bauxite for TALCO, the country's largest source of revenue and foreign currency). Conflict with the President? -------------- ¶5. (SBU) Asadullozoda obviously holds a privileged position in Tajikistan, but analysts differ on his influence with President Rahmon. Some have described him as the President's proxy or favored son, and say that many economic policy decisions in the country are made to increase his personal holdings. Many believe that Tajik Air -- burdened with debt -- will be allowed to fold, and that Asadullozoda's Somon Air will become the state airline. While he DUSHANBE 00000829 002 OF 002 does not have an official position in TALCO, many believe he is functionally the company's Chairman. TALCO's commercial director, Sherali Kabirov, is a close associate of Asadullozoda, and Asadullozoda's Somon Capital is fronting a plan for the conversion of TALCO to domestic, vice imported, mineral resources. ¶6. (SBU) However, there are rumors that Asadullozoda's success has caused discord in the Rahmon family. The President's son, Rustam, reportedly shot Asadullozoda in May (reftel A),and the President's daughter, Tahmina, who herself has significant business holdings, may be a rival to Asadullozoda. In April 2008, authorities took Asadullozoda's radio station off the air, reportedly because it was too critical of the government. Some observers downplay this incident, saying that Asadullozoda has little day-to-day involvement with the station. However, it does indicate that Asadullozoda's holdings are not immune from the government's wrath. Comment -------------- ¶7. (SBU) Comment: Many of those who know Asadullozoda have said that his primary motivation is to control as many revenue generating enterprises as possible, to the exclusion of others. Businesspeople in Tajikistan view him as a predator, and they fear losing their businesses to Asadullozoda's draconian methods. There are rumors that the demise of the founder of the Orima supermarket chain (reftel B) and the desire of the owner of a major telecom company to sell are linked to Asadullozoda's designs on their businesses. Asadullozoda fits very well into one of President Rahmon's important governing principles -- maintain as much personal control of the country's assets as possible. ¶8. (SBU) Comment continued: While Asadullozoda employs harsh, predatory methods, he is pragmatic enough to recognize that he needs competent people to manage his businesses. He has not adhered to the type of Kulyobi nepotism that characterizes the government. He has made an effort to hire qualified managers, and he has distinguished himself from President Rahmon's other family members, whom most judge to be untalented and incompetent. However, his fortunes are tied closely to those of the President. He does not have his own political constituency, and he does not have specific ties to Russian power brokers. Asadullozoda's demise, whenever it comes, will be either the result of rivalry with the President's offspring, or because Rahmon himself has lost power. Asadullozoda's position as the most powerful businessman in Tajikistan, dependent as it is on the stability of the current regime, illustrates the shallowness of private sector development in the country. End Comment. JACOBSON