Abramovich aides accused of hiding mansions and jets to avoid tax

0Roman Abramovich’s aides have been accused of rerouting his fortune from Cyprus to the Caribbean to evade tax – Shutterstock/SERGEY BOBYLEV/SPUTNIK/KREMLIN POOL/EPA-EFERoman Abramovich’s offshore empire falsified financial documents to avoid tax on assets hidden in the British Virgin Islands, it has been claimed.

Aides of the Russian oligarch, and the accountancy firm Deloitte Cyprus, are accused of falsely backdating documents to shield his sprawling offshore empire from tax.

More than £500m of assets vanished from Mr Abramovich’s company accounts, having been rerouted from Cyprus to the Caribbean. The transaction was then time-stamped to make it look like it had happened years earlier, it was alleged.

This allegedly enabled his advisers to circumvent a Cypriot law introduced in 2006 that required him to reveal his assets and made them liable to tax.

Analysis of more than 500,000 leaked confidential documents from Cyprus appeared to show a long-running strategy of falsifying documents to limit transparency, the investigation by BBC Panorama, the Bureau of Investigative Journalism and other media partners claimed.

Mr Abramovich’s advisers were alleged to have backdated ownership documents for his West Sussex mansion and his luxury London penthouse to hide them from the Cypriot government.

Mr Abramovich, who has been sanctioned by the UK Government since the start of the Ukraine war, has strenuously denied any wrongdoing.

After Russian oil deals, funds were moved into offshore companies in Cyprus, where MeritServus, a corporate services firm, managed Mr Abramovich’s global assets.

MeritServus was owned by Deloitte Cyprus until 2005. After the two firms split, they both provided services regarding his accounts.

The tax law introduced in Cyprus in 2006 meant company accounts had to be made public, and could have exposed the extent of Mr Abramovich’s wealth, the Panorama investigators alleged.

When the law passed, Deloitte Cyprus had prepared the 2003 draft accounts for Amiscan Investments, Mr Abramovich’s company, but had not yet finalised them.

The accounts initially showed $672m (£508m) of luxury property, including the 424-acre Fyning Hill estate in West Sussex.

An estate in the south of France, helicopters, private jets and a fleet of boats the oligarch owned at the time, including the $147.5m Pelorus, were also listed.

Mr Abramovich’s associates are alleged to have backdated contracts to show the assets had been transferred in 2003 to Amiscan’s parent company in the British Virgin Islands, where ownership details did not have to be publicly declared.

In 2006, Deloitte Cyprus signed off the 2003 accounts, despite the leaked documents showing that the company knew they were misleading, the Panorama investigation claimed.

The new accounts removed the mansions, yachts and planes, leaving only $75,000 of assets in the Cypriot ledger.

Backdated documents had also been used in a tax evasion scheme that disappeared billions of dollars, the Panorama investigation alleged.

Mr Abramovich held more than $10bn of his business fortune in a company called Electus Investments in Cyprus.

In 2006, MeritServus retrospectively signed and backdated documents to show that the fortune had been transferred to the British Virgin Islands three years earlier.

This meant that when the Electus Investments accounts were made public, the $10bn fortune had disappeared and only $145,000 of assets remained.

Andrew Mitchell KC, an expert in financial services law, said Panorama’s evidence showed the scheme was “straightforward” tax evasion and “it couldn’t be more blatant”.

“If it happened in England and it was in the millions, HMRC would be thinking about a prosecution,” he said.

A third Cypriot company owned by Mr Abramovich, Kravin Investments, had almost $2bn in the bank in 2003 and had been earning interest on which it should have paid tax.

A 2005 email appearing to be from MeritServus to Mr Abramovich’s Russian associates said it would change the 2003 and 2004 financial statements to avoid paying this tax.

MeritServus backdated documents to show that Kravin was only holding and investing the funds on behalf of its parent company in the British Virgin Islands.

This made it look like it was not Kravin’s money, allowing Mr Abramovich’s company to evade millions in tax, it was claimed.

MeritServus closed in 2023 after Britain imposed sanctions on the firm and its founder for its role in helping Russian oligarchs hide their wealth.

Lawyers for Mr Abramovich have been contacted for comment, as have those from Deloitte Cyprus.

Deloitte Cyprus told the BBC it acted in compliance with applicable laws and professional standards, adding that it could not comment on specific allegations because the documents were more than 20 years old and no longer accessible to the firm.

Denying any wrongdoing on behalf Mr Abramovich, his lawyers told the BBC he was “not involved in the day-to-day operation of those companies” and that, where financial arrangements were proposed by professional advisers, “reliance on that advice was entirely proper and legitimate”.

His legal team added that the investigation provided no evidence that Mr Abramovich had authorised, directed or known about the backdating or falsification of any document, and denied that he had evaded tax or concealed his fortune.

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