Pandora Papers: Pro-Erdoğan holding evaded taxes via offshore accounts

Known for being the recipient of extensive state tenders including the construction of Erdoğan's presidential palace, AKP-ally Rönesans Holding evaded taxes on revenue paid with taxpayers' money by transferring funds to Britain's Virgin Islands, according to the Pandora Papers, Deutsche Welle reported on Oct. 3.

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A staunch supporter of the ruling Justice and Development Party (AKP) and the recipient of billions'-worth state tenders including the construction of President Recep Tayyip Erdoğan's palace, Rönesans Holding was revealed to have evaded taxes worth over $200 million from projects they were paid for in taxpayers' money by transferring funds to accounts in the Virgin Islands, Deutsche Welle reported on Oct. 3 upon the publication of the Pandora Papers.

Rönesans Holding received about 16 billion liras worth of state tenders from the AKP government in the past 10 years alone, including the construction of the City Hospitals that were highly criticized by healthcare industry experts. 

State tenders are a common tool of wealth redistribution employed by the AKP, often assigning massive projects to their allies to funnel public funds into the hands of a small elite. 

Gathered by the International Consortium of Investigative Journalists (ICIJ), Pandora Papers revealed that the mother of Rönesans Holding founder Erman Ilıcak, Ayşe Ilıcak founded two companies dubbed Dolmine International Ltd. and Covar Trading Ltd.

Both entities were established on March 17, 2014 in Switzerland, when the construction of Turkey's Presidential Palace was still ongoing by Rönesans Holding and were listed to be functional in the same industries as the AKP ally firm. 

Covar Trading Ltd.'s accounting revealed a $105,524,000 income in the year 2015, and a subsequent "donation" of the exact same amount leaving the company's funds shortly after. 

Meanwhile, Ayşe Ilıcak's Dolmine International Ltd. company received $105,212,000 in their Swiss accounts in 2015, their accounting revealed, and an additional $491.616,16 in interest revenue was added to their funds. 

Neither of Ayşe Ilıcak's Swiss-based companies had any income or financial activity recorded in 2016 and 2017: This brings the number that Ilıcak failed to pay taxes on to $210,736,132 in one year alone. 

The amount Ilıcak withheld from taxes would have contributed almost 750 million Turkish Liras to the Treasury with a 40-percent taxation rate: These funds would have allowed for the construction of 25 elementary schools, eight hospitals or dormitories for 15,000 students. 

Meanwhile, Rönesans Holding owner Erman Ilıcak doubled his declared personal assets from $2.1 billion in 2015 to $4.4 billion in 2021. 

Separately, Rönesans Holding's Russian director Alexander Tarasyuk was accused of a $10 million tax evasion, but was able to avoid prosecution after paying an $11 million fine. 

'They take money out of workers' pockets'

Workers in the company's facilities in Russia's Amur region have reported maltreatment in the form of food with bugs in them and a lack of COVID-19 precautions and the workers in Turkey said that their situation wasn't too different. 

Rönesans Holding employee Sadık Gergin told Deutsche Welle that their signatures were forged on papers that placed them on unpaid leave, which allowed for a portion of their wages to be paid in cash and evade taxes, alongside workers' social security payments.

"They steal from the poor and the downtrodden, but we're the ones who rise up their skyscrapers," Gergin said. 

Another employee, Onur Mennan Attar also said that the company failed to pay his father compensation and that they blatantly said during negotiations that "they would never settle."