Azerbaijan’s rulers operated a secret $2.9 billion scheme to pay prominent Europeans, buy luxury goods and launder money through a network of opaque British companies, an investigation by the Guardian newspaper claims.

Leaked data shows that the Azerbaijani leadership made more than 16,000 covert payments from 2012 to 2014.

The revelations once again highlight the use of the lightly regulated British corporate landscape to move large sums of money around, beyond the purview of regulators and tax authorities, the Guardian contends. Seven million pounds was spent in Britain on luxury goods and private scho...