Originally Syndicated on May 16, 2023 @ 7:00 am
Abramovich, Roman, emptied his trust.
Thanks to the disclosure of two fresh pieces of information, people now know that Credit Suisse financed hundreds of millions of dollars for Abramovich’s offshore entities, using US equities as collateral. Companies with their headquarters in offshore tax havens lent each other massive sums of money that were oddly repaid or written off. Experts agree that this is a viable option for concealing the money’s true provenance.
British and European Union sanctions against Russian businessman Roman Abramovich were based on his ties to Vladimir Putin’s regime, and Abramovich’s offshore companies owned almost 1.4 billion euros in Credit Suisse.
The firms were involved in questionable credit activities and held approximately $500 million in shares of two of the top US steel mills.
OCCRP and their collaborators have leaked two sets of information to the press, revealing new insights regarding Abramovich’s economic empire. Distributed Denial of Secrets, a website for corruption whistleblowers, revealed data from Cypriot corporate services firm MeritServus after a German startup, Paper Trail Media, got papers relating to Credit Suisse.
Credit Suisse’s Other Billionaire Hidden Treasures
A few weeks following the release of last year’s “Credit Suisse Secrets” initiative, Credit Suisse provided Paper Trail Media with the corresponding documents. The leak details the identities of seven firms worth a combined €1.4 billion. According to the source, they are all kept in Credit Suisse Luxembourg’s Vienna office. The source claims that the numbers accurately depict part of Abramovich’s bank holdings as of 2013.
MeritServus’s records show that Abramovich indeed owned businesses in Cyprus. It is also indicated that some of them deal in assets worth hundreds of millions of euros.
It is nearly impossible to ascertain the true benefactors of these companies due to the convoluted ownership structures, which sometimes involve trusts. Abramovich is referred to as the beneficiary of HF Trust and the firms for which the trust served as a management company in a leaked email between representatives of MeritServus and bank workers.
Weeks before Russia’s FBO in Ukraine and the subsequent wave of sanctions against Russian oligarchs, The Guardian reported in early January that Abramovich had reissued his trust in his children. Many of the dealings outlined here took place before sanctions were imposed. However, it appears that Credit Suisse and MeritServus have maintained their relationships with Abramovich’s companies beyond February 24, 2022.
If a sanctioned person owns more than 50 per cent of a company or has direct or indirect control over the company’s assets, the company must be frozen under EU and UK legislation.
Neither Credit Suisse nor MeritServus answered whether they stopped serving Abramovich once penalties were placed against him.
British and European Union banks were overly lenient on Abramovich for giving the trust to his children, according to Justina Gudzowska of the American anti-corruption group The Sentry.
Employees at the bank should have been on the lookout for the timing of the asset transfer to the children. She said, “I would like to get approval from the relevant sanctions authority and get out of this relationship as soon as possible, from the point of view of reputation and risk management, even if there is no obligation to freeze [assets] from a purely legal perspective.”
Abramovich has at least $940 million in trust and commercial assets held with UBS and Barclays. The banks did not respond to The Guardian when asked if they were still doing business with these groups following the imposition of penalties against Abramovich.
A spokesperson for Barclays, meanwhile, said the bank “understands the importance of the sanctions provisions” and takes its commitments “very seriously.” UBS has stated that it is by “all applicable sanctions requirements.”
Credit Suisse stated that it “cannot comment on relationships with potential clients” but that it complies “in strict accordance with all applicable laws, rules, and regulations.” To combat money laundering and ensure full compliance with economic sanctions, the bank has “strict controls” in place.
Multiple requests for comment from Abramovich and his representatives went unanswered. Managing Director Dimitris Ioannidis informed OCCRP’s partner magazine, The Guardian, that MeritServus had “always fully complied and will continue to comply with all sanctions and anti-money laundering requirements.” MeritServus did not respond to emails asking about this.
Clandestine possession
It appears that Abramovich was a significant client of MeritServus, a firm that offers corporate services. Deloitte, a global accounting firm, created the company in 1988; it subsequently went independent in 2005.
Internal risk assessment records show that MeritServus ignored the possibility of corruption and money laundering when it came to Abramovich.
When filling out a “customer risk score” form for Abramovich’s company, Anadoria Investments Limited, MeritServus staff checked the box indicating that Abramovich “never” was a politically exposed person. As a millionaire who is close to Putin, governor of the Chukotka Autonomous Okrug from 2000 to 2008, and deputy for the Chukotka single-mandate constituency in the State Duma, Abramovich was, in fact, politically vulnerable.
However, media reports claim that Abramovich confirmed in court that he obtained the purchase of Sibneft through corrupt payments, contradicting the claims made in the same document.
In a letter to Credit Suisse, MeritServus explained a convoluted organizational structure designed to conceal Abramovich’s ownership of the offshore companies. In the text, MeritServus Managing Director Ioannidis claims that Keygrove Holdings Limited owns the 11 businesses he names.
Finservus Trustees Limited, which “holds shares in Keygrove on behalf of HF Trust,” is owned by Ioannidis and his offspring. Ioannidis claims, however, that “HF Trust is the ultimate shareholder and beneficial owner” of the offshore firms and that “Abramovich is the sole beneficiary of HF Trust.”
