Roman Abramovich, the Russian oligarch, has been accused that he and his associates, including leaders of Deloitte in Cyprus, used falsified financial documents to hide assets worth billions of dollars and to avoid tax obligations.
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A joint investigation by BBC Panorama and the Bureau of Investigative Journalism showed that financial statements audited by Deloitte may have helped remove luxury assets worth $672 million from the balance sheet of a company owned by Abramovich.
According to documents obtained by the investigation, the hidden assets included luxury yachts, villas, apartments, helicopters and private jets. Suspicions were also raised that backdated documents were used to alter the appearance of financial transactions and to evade taxes in Cyprus.
Amiscan Investments, a Cypriot company, was one of the identified cases. In 2003, it held assets worth $672 million. When legislation was passed in 2006 requiring Cypriots to publish their financial statements, Abramovich’s associates are suspected of arranging a retroactive transfer of assets to the parent company, registered in the British Virgin Islands.
Deloitte Cyprus, according to the investigation’s findings, reviewed the documents and deemed them sufficient for removing the assets from the company’s balance sheet. After the financial statements were approved in 2006, the luxury assets were no longer reported, while the remaining value on the balance sheet was about $75,000.
Another example was Kravin Investments, which in 2003 had nearly two billion dollars in bank accounts. The interest income from these funds represented revenue that, according to the investigation, could have been subject to taxation in Cyprus.
The uncovered documents showed that Abramovich’s advisers, after consultations with Deloitte in 2005, discussed changing the financial statements and accounting data of previous years. MeritServus, the company that managed the oligarch’s business network from Cyprus, then prepared documents presenting Kravin Investments as a company that held and invested money on behalf of its parent company in the British Virgin Islands.
The BBC reported that this scheme is suspected of allowing the avoidance of millions of dollars in taxes. The uncovered correspondence also shows that Deloitte requested changes to bank balances, interest income, and profit and loss accounts.
The investigation also included Electus Investments, a company through which assets worth more than $10 billion were managed. According to the documents, Abramovich’s advisers are suspected of preparing backdated documents with the aim of presenting the assets as if they belonged to another company with the same name, registered in the British Virgin Islands.
Andrew Mitchell, a financial services lawyer, assessed the collected evidence as proof of a clear case of tax evasion. Cypriot MP Christos Christofides stated that, if the violations were confirmed, the authorities should consider recovering the tax obligations and holding the individuals involved accountable.
Roman Abramovich’s lawyers denied the claim that the oligarch avoided taxes or hid his wealth illegally. According to them, he did not participate in the day-to-day management of the companies and it was lawful for him to seek advice from financial professionals.
Abramovich’s representatives also stressed that the investigation did not prove that the oligarch knew about the forgery of documents, authorized it, or ordered it to be carried out.
On the other hand, Deloitte Cyprus stated that it could not comment on the specific allegations because the files related to events that occurred more than 20 years ago and were no longer available.
Roman Abramovich, the former owner of Chelsea Football Club, was sanctioned by Britain after the Russian invasion of Ukraine in 2022 and was forced to sell the club. His assets, worth 5.4 billion pounds on the island of Jersey, have continued to grow, while a criminal investigation into the matter has been ongoing for four years.
The new data is based on thousands of documents relating to Abramovich’s finances and a network of companies governed from Cyprus during the period 1995-2022. They raise questions about the role financial advisers may have played in managing the Russian oligarch’s wealth.
