Details of the alleged purchase were contained in the Pandora papers, which were released this evening. They alleged that the family and associates of the Azerbaijani president, Ilham Aliyev, have traded close to £400m of UK property over the past 15 years through a network of offshore companies.

Clients reportedly include the Queen’s crown estate which allegedly paid £66.5m in August 2018 for 56-60 Conduit Street.

The eight-storey office and retailing property in London’s exclusive Mayfair district was bought from a British Virgin Islands-based company called Hiniz Trade & Investment, it has been claimed.

Hiniz had acquired the building for £35.5m in 2009, according to papers released by The Guardian and BBC. 

It said that the Pandora papers showed how ownership of the company was passed from the president’s daughter, Arzu Aliyeva, to her grandfather Arif Pashayev, who then placed the company into a trust in 2015.

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The leaked files do not show the source of the funds originally injected into Hiniz, it was reported.

But it allegedly revealed disclosure of the company’s shareholders – and how it switched between members of Azerbaijan’s first family – could raise questions about whether the transaction should be investigated on money-laundering concerns.

Dylan Kennedy, a former UK law enforcement officer and director of the financial due diligence company Intelpool, told the paper: “The onward sale of any property that had originally been purchased with potentially dirty funds completes the money laundering cycle, by providing a fresh paper trail that effectively legitimises the proceeds.

“In this case, if the source of funds is shown to be questionable, the sale of a property to the crown estate is the pinnacle of legitimisation.”

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The crown estate said it had been “provided with details of the ultimate beneficial owner of Hiniz Trade and Investment Limited, but no other ownership details”.

A spokesperson for the estate, which manages £15bn of property assets, said: “Before our purchase of [the building] we conducted checks including those required by UK law.

“At the time we did not establish any reason why the transaction should not proceed. Given the potential concerns raised, we are looking into the matter.”

Mr Aliyev has ruled Azerbaijan since 2003 – when he succeeded his father.

The country has frequently been accused of human rights abuses, rigged elections and systemic corruption.

A 2015 European parliament resolution called on “EU authorities to conduct a thorough investigation into the corruption allegations against President Aliyev and members of his family”, following a series of stories by Azerbaijani investigative journalists accusing the first family of personally benefiting from state contracts and business deals.

And in 2017, the human rights campaign group Freedom House also criticised the country for “widespread and pervasive” corruption in a report.

“As long as the ruling elites continue to enrich themselves at the expense of the public purse, government anti-corruption measures will have limited impact,” it said.

Express.co.uk has contacted the Palace for comment.