Anyone who has traversed Britain’s cities over the past two decades will recognise the American candy stores and souvenir shops that have spread across the country like Japanese knotweed. The stores, radiating surgical-grade light from their empty interiors, imbue places like the West End with an uncanny quality. Everything about these establishments seems designed to repel customers. So what exactly has led to the proliferation of these shops? Over the past few years, stellar reporting from London Centric and Private Eye has shone a light on some of the misdoings of the ‘dodgy shops’ but until now, no one has given a full, up to date account of their rise, or uncovered the main actors involved. The answer, it turns out, lies in Afghanistan, the graveyard of empires.
Two months after two planes hit the World Trade Center on 11 September 2001, George Bush sent American troops to oust the ruling Taliban. America claimed to be transforming one of the world’s poorest countries into a democracy. But the Hamid Karzai regime that took over in the resulting power vacuum would instead bring about the return of the corrupt warlord class that had dominated Afghanistan before the Taliban’s accession in 1996. Western powers flooded billions of pounds of aid into this new Afghanistan, much of which was siphoned off by the reemergent warlords. A 2009 calculation of these losses estimated that $3.65 billion was leaving the country every year via Kabul airport. In time, this cascade of corruption would completely undermine the fledgling state.
However, our investigation indicates that some of the aid money which left Afghanistan over the peaks of the Hindu Kush would eventually return to the UK, finding an unlikely safe haven on the streets of London – in a company called LaModa UK Limited. The company was formed on 6 June 2006 by three young Afghan businessmen. In its first year, LaModa took out a lease in Bayswater, and another three in the Trocadero Centre, which had just been taken over by Asif Aziz, who was beginning to build a sprawling property empire.
They then leased another unit at 35 Whitehall, and another at 21a Buckingham Palace Road. Those in the legitimate gift shop trade at the time told The Fence that those behind LaModa and their network controlled approximately 100 shops (one of the businessmen behind the shops claims it was closer to ten) by the end of 2019.
Commercial documents obtained by The Fence show that the group were using a process known as ‘phoenixing’, where companies are repeatedly liquidated and set up under new names, to avoid payment of tax and other debts. Our analysis shows the group leaving thousands in unpaid business rate bills at multiple addresses across central London, including at addresses in the Criterion building and one for £325,000 at House of Secrets, an unofficial ‘Harry Potter’ shop on 146– 148 Oxford Street. With remarkable speed, LaModa transformed shops on high streets. After they moved into 21a Buckingham Palace, it became a Palace Gift Store, then a Palace Gifts and, the last time I checked, a depressing black-and-gold-fronted unofficial Harry Potter shop called House of Wonders.
The shops, particularly in the beginning, appeared to have few customers, so their rapid proliferation made no sense. Where was the money coming from? A recording obtained by The Fence, which involves a senior member of the network, indicates that the shops were being used as a launderette for aid money flowing out of Karzai-controlled Afghanistan.
‘UK government ends up better off,’ one Afghan souvenir man remarked to the source who shared the tape with The Fence, ‘development aid goes in [to Afghanistan], and even more comes back.’ This is not how it’s supposed to work. While most other governments had managed to block illicitly commandeered aid money returning from Afghanistan, Britain let it flow through its doors. This, the souvenir man concludes, shows that ‘England is smart.’ Assertions made to The Fence by two sources in the pre-Taliban government supported his claim. His explanation was further strengthened by the fact that multiple members of the group are connected to senior figures in the regime under which billions went missing.
Behind LaModa, the commercial core of a web of companies that controlled gift shops across the country were three Afghan businessmen: Ghulam Sarwar Afzaly (who has now changed his name to Sarwar Nabizoda), his relation Mohammed Jan Sakizadeh and Nasar Mirwais. Our investigation has found a series of connections between members of this core group and their associates with the deposed regime of Hamid Karzai, and the new opposition led by Ahmad Massoud. The most obvious connection was through Ghulam Sarwar Afzaly, who multiple Afghan government sources said had been an ally of Afghanistan’s former Minister of Foreign Affairs, Abdullah Abdullah. Afzaly claims he does ‘not know him personally’, but our research found that he continues to retain ties to some of Abdullah’s closest allies while the latter was in government.
