A British magazine has alleged that a network of Afghan businesspeople used souvenir and confectionery shops in the United Kingdom to launder international aid money taken out of Afghanistan years earlier, avoided paying taxes and escaped debts by repeatedly dissolving and reopening companies. However, Ghulam Sarwar Afzali, one of the main businessmen linked to the network, has strongly denied all the allegations.
In a newly published investigation, British magazine The Fence alleged that a network of Afghan traders built an extensive chain of souvenir shops, American candy stores and unofficial Harry Potter shops in London and several other British cities, and may have invested international aid money taken out of Afghanistan in those businesses.
The report, titled “The Graveyard of Empires,” was written by journalist Cormac Kehoe and published on July 16, 2026. It presents a series of allegations based on business documents, company accounts, property records, an audio recording and interviews with several sources.
Wesal TV has not independently verified the allegations contained in the report.
Formation of LaModa
According to The Fence, LaModa UK Limited was the central company in the business network. The company was incorporated on June 6, 2006, by Ghulam Sarwar Afzali, Mohammad Jan Saqizada and Naser Mirwais. The report says Afzali later changed his name to Sarwar Nabizada.
During its first year of operation, the company reportedly leased several commercial units in London, including properties in Bayswater, the Trocadero Centre, Whitehall and Buckingham Palace Road.
People involved in the legitimate souvenir trade told the magazine that the businessmen behind LaModa and their associated network controlled about 100 shops by the end of 2019. However, one of the businessmen reportedly said the number was closer to 10.
Alleged use of company dissolution and reincorporation
The investigation alleges that companies associated with the network used a practice known as “phoenixing.”
Phoenixing generally refers to the dissolution of a company carrying debts and financial liabilities, while the same or a similar business continues operating under a newly formed company and a different name.
The magazine alleged that the group left behind hundreds of thousands of pounds in unpaid business-rates bills at several addresses in central London.
According to the report, approximately £325,000 in business rates remained unpaid in connection with the unofficial Harry Potter shop called House of Secrets, located at 146 and 148 Oxford Street.
Allegation of laundering aid money
The most serious allegation in the report is that the shops may have been used to launder international aid money taken out of Afghanistan.
The magazine said it had obtained an audio recording in which a member of the network was heard speaking. It alleged that the contents of the recording suggested money removed from Afghanistan during the government of former president Hamid Karzai was introduced into the businesses through the shops.
According to a recorded conversation cited in the report, an Afghan souvenir trader said development assistance went to Afghanistan, but even larger amounts of money were then transferred back to Britain.
However, the published report did not provide a detailed account of the exact route of the alleged funds, complete banking records or a direct link between the money and specific international aid programmes.
Alleged links with former Afghan officials
The report also alleged connections between some members of the network and officials of Afghanistan’s former government.
Citing several former Afghan government sources, the magazine reported that Afzali had links with former foreign minister Abdullah Abdullah. Afzali, however, said he did not know Abdullah personally.
The magazine also reported that Hafizullah Shakir, who had previously worked for the Afghan government in Abu Dhabi and at the United Nations office in Kabul, supplied goods to the shops.
Humayun Hassani was also named in the report and was said to have been registered as a director of 14 souvenir and confectionery companies.
Connection with Ahmad Massoud
The report alleged that Afzali also had links with Ahmad Massoud. According to the magazine, Afzali was a member of Massoud’s delegation that travelled to the Austrian Parliament in April 2023 for discussions related to the Vienna Process.
The magazine also reported that Afzali served on the advisory board of Mosaic Foundation Afghanistan in the United Kingdom. The foundation was reportedly established by Zalmai Nishat, a former senior adviser to the Afghan government.
The report did not present evidence suggesting that Ahmad Massoud, Abdullah Abdullah or the foundation was involved in the alleged financial misconduct. It referred only to Afzali’s political and social connections.
Tax and accounting concerns
The report said Cool Britannia Retail was one of the network’s most important trading companies. It reportedly recorded turnover of nearly £10 million in 2009 and employed 106 people.
Sources cited in the report alleged that some companies in the network did not charge customers value-added tax, or VAT, giving them a financial advantage over law-abiding competitors.
According to the report, auditors issued a qualified opinion on the company’s financial statements in 2011 because they had not observed the stock-counting process and could not verify the accuracy of recorded inventory valued at £1.58 million.
The report said a similar issue arose again in 2014, when the recorded value of the stock had increased to nearly £3.5 million.
Properties worth millions of pounds
Based on an analysis of property records, the magazine reported that some of the network’s main members had purchased homes and commercial properties worth millions of pounds in London and other areas.
According to the report, Naser Mirwais bought a large house in Golders Green, while Afzali purchased a £1.3-million flat in Fulham and another house worth nearly £1 million in New Malden.
The report said the network began making extensive property purchases in Britain after the formation of Eton Holdings Limited.
According to the magazine, the company bought a £2-million property opposite Canterbury Cathedral in 2019, another property worth £2.15 million opposite the British Museum and several properties in Scotland with a combined value of more than £2 million.
The report alleged that Afzali provided a personal loan of £745,000 to Eton Holdings in 2020 and that Cool Britannia had loaned the company £843,443 by November 2024.
Afzali denies all allegations
Ghulam Sarwar Afzali rejected all the allegations in response to The Fence investigation.
“I strongly deny any allegation that I or my companies have engaged in wrongdoing,” he told the magazine.
Afzali also said allegations of avoiding VAT and business rates, laundering Western aid money and using phoenixing practices were “completely false.”
The report did not state that Afzali or any of the other individuals named in the investigation had been convicted by a court of money laundering, tax fraud or any other financial crime.
Wesal TV is seeking direct comment from Ghulam Sarwar Afzali and other individuals named in the report. Their responses will be added to this story once received.
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