An offshore company owned by the mother of Erman Ilıcak, a Turkish business tycoon whose construction conglomerate Rönesans Holding made billions of lira from state tenders, paid all its revenue, $105.5 million, as a “donation” listed under “extraordinary expenses,” Deutsche Welle’s Turkish Service reported, citing the Pandora Papers, a massive document leak unearthed by a consortium of investigative journalists.
In 2014 billionaire Ilıcak’s Rönesans Holding finished building a 1,150-room presidential palace for Turkey’s leader, Recep Tayyip Erdoğan, amid criticism about cost overruns and corruption.
Erdoğan’s presidential complex in Ankara was at the center of criticism when it was constructed due to its large budget, expensive interiors, more than a thousand rooms and luxurious design as well as the felling of trees in its neighborhood.
More than TL $244 million had been spent on the palace, twice the original estimate, when Erdoğan moved into the palace in November 2014.
According to the papers uncovered by the International Consortium of Investigative Journalists (ICIJ), another noteworthy event involving the Ilıcak family took place in 2014. The corporate titan’s 74-year-old mother, Ayse Ilıcak, became the owner of two offshore companies in the British Virgin Islands.
Both companies were fronted by nominee directors and nominee shareholders. One of the companies, Covar Trading Ltd., held assets from the family’s construction conglomerate, according to the records uncovered by the leak.
During its first full year in operation, Covar Trading earned $105.5 million in income from dividends, according to financial statements cited by the ICIJ report. The money was stashed in a Swiss account.
“It didn’t stay long,” the ICIJ report says, adding that within the same year, the company paid almost the entire $105.5 million as a “donation” listed under “extraordinary expenses.” The statements do not describe who or what received the money, according to the ICIJ. The reporters said Ilıcak did not reply to questions for the story.
According to the leaked documents, Rönesans Holding evaded more than $200 million in taxes from projects paid for with taxpayers’ money by transferring funds to accounts in Britain’s Virgin Islands.
Rönesans Holding has been awarded some 16 billion lira ($1.8 billion) in state tenders by the ruling Justice and Development Party government in the past decade.
The other company founded by Ayşe Ilıcak, established under the name Dolmine International Ltd., received $105,212,000 in their Swiss accounts in 2015, according to the Duvar English news website, citing the company’s records.
Neither of Ayşe Ilıcak’s Swiss-based companies had any income or financial activity recorded in 2016 and 2017, Duvar English said.
Rönesans Holding owner Erman Ilıcak doubled his personal assets from $2.1 billion in 2015 to $4.4 billion in 2021.
Erdoğan, his family, and the Turkish government are frequently criticized for wasting taxpayer money on a luxurious lifestyle and mismanaging Turkey’s resources.
Critics accuse Turkey’s pugnacious leader of taking control of the country’s media and enriching himself by using state tenders to award businesspeople who staunchly support his rule.