Cablegate: Tajikistan's Hasan Asadullozoda - Man, Myth, Legend

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RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #0829/01 1750448
ZNR UUUUU ZZH
R 230448Z JUN 08
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0664
INFO RUCNCIS/CIS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0111
RUEHIL/AMEMBASSY ISLAMABAD 0154
RUEHNE/AMEMBASSY NEW DELHI 0123
RUEHBUL/AMEMBASSY KABUL 0185

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

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