Jahangir Hajiyev, the former chairman of International Bank of Azerbaijan (IBA) embezzled AZN211.59mn (€125mn), the interior ministry said after concluding an investigation into the case of mismanagement and misappropriation at the the country's largest bank.

IBA's problems with asset quality were exacerbated by a devaluation of the Azerbaijani manat in February 2015; by March, Hajiyev had stepped down and Baku took over the bank to shed light on its problematic loans, some of which were believed to had been given out on political criteria and without much due dilligence. The ensuing scandal took down several prominent businesspersons, including Nizami Piriyev, founder and former owner of methanol plant Azmeco, which has since become property of state-owned oil company Socar.

The Azerbaijani government was faced with non-performing loans as high as AZN10bn, according to some estimates. A clean-up in the higher ranks of the management saw the removal of dozens of managers from the central office in Baku and from some of the largest foreign branches, such as those in Dubai, Russia and Georgia. To date, Baku is said to have injected some AZN3bn into the bank, and there are plans to privatise the state-owned behemoth after its balance sheet is clean. 

While he was at the banks' helm between 2001 and 2015, Hajiyev is believed to have “created an organised group on preliminary arrangement with others, abused his official powers by opening bank accounts for himself, his family members, and other persons and transferring large amounts of funds to those accounts,” APA news agency wrote on June 23 citing the official report. Hajiyev and his acquaintances are said to have founded more than 100 companies under the guise of implementing various projects in the country and abroad, the end goal of which was to embezzle money.

Seven bank employees in addition to Hajiyev are currently under arrest; furthermore, Hajiyev's wife Zamira Hajiyeva has been placed under arrest in absentia and is on the government's wanted list.