Deloitte, one of the world’s largest accounting firms, allegedly helped Roman Abramovich shield cash and valuable assets—including luxury yachts, mansions and private aircraft—from tax, according to leaked documents.
A BBC Panorama investigation reported that financial records may have been falsified and backdated in an alleged effort to protect the Russian billionaire and former Chelsea FC owner from paying millions of pounds in tax.
Abramovich’s lawyers deny any wrongdoing, saying he acted on professional advice.
The leaked files suggest advisors at corporate services provider MeritServus transferred Abramovich’s £7.5 billion ($10bn) business fortune from a Cyprus-registered company, Electus Investments, to a British Virgin Islands company bearing the same name.
According to the documents, the paperwork was backdated to make the transfer appear to have taken place in 2003—before Cyprus introduced new transparency rules in 2006.
When the Cypriot company later published its accounts, the records appeared to show that it held assets worth just £110,000 ($145,000), it is claimed.
MeritServus was owned by Deloitte until 2005. Deloitte is now the largest of the “Big Four” accounting firms. Following their separation, the two companies continued working with Abramovich’s associates to oversee parts of his international wealth.
Labour peer and accountancy professor Lord Sikka accused Abramovich’s financial advisers of operating what he called a “fiddle factory”.
Leaked documents allegedly indicate that Deloitte advisers helped former Chelsea owner Roman Abramovich conceal billions of pounds in cash and assets to avoid tax
“The amounts are very significant, very material, and they are being backdated—retrospectively being moved. It is trying to cover up something,” he said.
“What we appear to have here is a fiddle factory. In a fiddle factory, you fiddle the transactions, you backdate them, and that is what appears to have been happening here regularly.
“Companies are required to publish true and fair accounts, and if the transaction dates are being misrepresented, that is not being truthful. That is a violation of a statutory duty. So I think it is pretty scandalous, really.”
Separate leaked records allegedly show how £507 million ($672m) worth of luxury property owned by Abramovich through another Cyprus-based company, Amiscan Investments, was concealed.
The assets reportedly included a mansion in West Sussex, an upscale London apartment and an estate in the south of France. They also included supercars, helicopters, private jets and several boats, among them the £111.5 million ($147.5m) yacht Pelorus.
ALSO READ: New Agency Decides Who Is a Real New Yorker, Denies Famous Native
The investigation alleges that Deloitte removed the assets from Amiscan Investments’ published accounts by recording a supposed transfer to a British Virgin Islands company, then backdating the transaction by three years.
Panorama also reported claims that Abramovich’s advisers used another Cyprus-based company, Kravin Investments, in an alleged effort to reduce his tax liability.
The leaked files purportedly show that earlier company records were altered to suggest Kravin Investments did not own almost £1.5 billion ($2bn), meaning it had no taxable interest income.
In a 2005 email sent by MeritServus to Abramovich’s Russian associates, the firm said a plan had been developed following a meeting with Deloitte.
“If you agree, it will be necessary to change the financial statements and the accounting records accordingly for 2003 and 2004,” the email stated.
A Russian associate responded a month later: “I agree.”
It’s claimed MeritServus then created a series of backdated documents which falsely showed Kravin was only holding and investing the funds on behalf of its parent company in the BVI.
This made it look like Kravin did not actually own the money, so it would not be liable for tax in Cyprus.
Banking and financial services lawyer Andrew Mitchell KC said: ‘It’s a straightforward and blatant move to protect from legitimate taxation assets which should otherwise have been subject to tax.
‘If it happened in England and it was in the millions, His Majesty’s Revenue and Customs would be thinking about a prosecution.’
Abramovich was sanctioned after Russia attacked Ukraine. It was claimed he had a close personal relationship with Russian president Vladimir Putin – something Abramovich denied.
He is understood to be living in Turkey, which has become a safe haven for Russian oligarchs because it did not apply sanctions.
Responding to Panorama’s allegations, Abramovich’s lawyers said he was ‘not involved in the day-to-day operation of those companies’ and that where arrangements were proposed by professional advisers, ‘reliance on that advice was entirely proper and legitimate’.
Deloitte Cyprus said it could not comment on the specific allegations because the documents were more than 20 years old and no longer accessible.
IN CASE YOU MISSED IT: Mystery Man Behind Kimberly Guilfoyle’s Business Deals Revealed
