Ex-Chelsea Owner Roman Abramovich Accused Of Using Deloitte To Hide $672Million Assets, Evade Taxes
Ex-Chelsea Owner Roman Abramovich Accused Of Using Deloitte To Hide $672Million Assets, Evade Taxes
The investigation also uncovered evidence suggesting that the accountancy firm advised on arrangements involving backdated documents to reduce tax liabilities.
Roman Abramovich, the Russian billionaire and former owner of Chelsea Football Club, allegedly used falsified financial documents to hide millions of dollars in assets and evade taxes through offshore companies.
According to BBC Panorama and the Bureau of Investigative Journalism, documents leaked from a network of offshore companies administered in Cyprus showed that Deloitte Cyprus approved accounts that removed $672 million worth of luxury properties, superyachts, private jets and other assets from Abramovich’s company records.
The investigation also uncovered evidence suggesting that the accountancy firm advised on arrangements involving backdated documents to reduce tax liabilities.
The findings are based on thousands of leaked documents covering the operations of companies linked to Abramovich between 1995 and 2022.
The records indicate that his associates worked with MeritServus, a Cyprus-based corporate services firm, to manage his international business interests.
One case involved Amiscan Investments, an Abramovich-linked company in Cyprus. In 2006, after new transparency rules required company accounts to be made public, documents were reportedly backdated to make it appear that $672 million in assets had been transferred to a parent company in the British Virgin Islands in 2003.
Deloitte Cyprus reviewed the documents and described them as “adequate” for removing the assets from Amiscan’s accounts. When the company’s 2003 accounts were approved in 2006, only $75,000 in assets remained, despite the earlier records listing luxury properties, aircraft and boats.
Lord Sikka, a professor of accounting at the University of Sheffield, described the alleged misrepresentation of transaction dates and failure to publish accurate accounts as a “violation of a statutory duty” and “pretty scandalous”.
The investigation also uncovered emails suggesting that advisers discussed changing the financial records of Kravin Investments, another Cyprus-based company linked to Abramovich, to avoid taxes on interest earned from nearly $2 billion held in its bank account in 2003.
An August 2005 email from MeritServus to Abramovich’s Russian associates stated that the financial statements and accounting records for 2003 and 2004 would need to be changed if the proposed arrangement was accepted. An associate subsequently replied, “I agree”, according to the leaked correspondence.
MeritServus then prepared backdated documents that purported to show that Kravin held and invested the money on behalf of its parent company in the British Virgin Islands, rather than owning the funds itself. This arrangement would have made it appear that the company was not liable for tax on the interest income in Cyprus.
A September 2005 email from Deloitte also referred to changes that would be required in the company’s bank balances, interest income and profit-and-loss account following the backdated changes.
Andrew Mitchell KC, a barrister specialising in financial services law, described the alleged arrangement as “straightforward” tax evasion. He said British tax authorities would consider prosecution if a similar scheme involving millions of pounds occurred in England.
The investigation further found that MeritServus backdated documents concerning Electus Investments, a Cyprus-based company that held more than $10 billion linked to Abramovich’s business fortune. The documents allegedly made it appear that a separate company with the same name in the British Virgin Islands had owned the assets since November 2003.
As a result, the Cyprus company’s publicly available accounts showed assets worth only $145,000, rather than the billions reportedly held through the business structure.
Cypriot lawmaker Christos Christofides said that if tax evasion had occurred, the authorities should seek to recover the money and ensure that anyone found guilty faced the consequences under the law.
However, Abramovich’s lawyers denied that he evaded taxes or concealed his wealth. They said the investigation provided no evidence that he knew about, authorised or directed the falsification of documents, adding that he was not involved in the day-to-day operations of the companies and was entitled to rely on professional advice.
Deloitte Cyprus said it could not comment on the specific allegations because the documents were more than 20 years old and were no longer accessible. The firm added that it “acts in compliance with applicable laws”.
The findings add to scrutiny of Abramovich’s international business dealings, following earlier investigations into how he built his fortune through Russian oil transactions in the 1990s. He has previously denied allegations of corruption connected to those deals.
Abramovich, who bought Chelsea Football Club in 2003, was sanctioned by the United Kingdom following Russia’s full-scale invasion of Ukraine in 2022 and was forced to sell the club. Meanwhile, £5.4 billion of his assets remain frozen in Jersey, where a criminal investigation has been ongoing for four years.
The latest findings form part of the wider Cyprus Confidential investigation into offshore financial arrangements. MeritServus closed following the leak of the documents.
