Leaked Roman Abramovich documents raise fresh questions for Chelsea FC

Fresh insights into the financial affairs of Russian oligarch Roman Abramovich, including offshore transactions apparently associated with his former ownership of Chelsea Football Club, are contained in a huge cache of leaked documents shared by the International Consortium of Investigative Journalists (ICIJ) Paper Trail Media and 67 media partners including The Irish Times.

The leaked documents, mainly from financial services companies based in EU member state Cyprus, show the extent of that country’s dealings with hugely wealthy Russian business figures and people close to the Kremlin, many of whom were sanctioned in the wake of the Russian invasion of Ukraine in February 2022.

Among the documents are financial accounts for 2018 for two companies based in the British Virgin Islands that were owned by a Cypriot trust the beneficiary of which was Mr Abramovich. Among hedge fund investments totalling $3 billion (€2.76 billion) held by the two companies at the end of 2018 were investments worth $358 million in four Irish-resident funds.

Mr Abramovich was sanctioned in the wake of the 2022 Russian invasion of Ukraine, with the EU citing the billionaire’s “long and close ties to [Russian president Vladimir] Putin”, a connection which it said had “helped him to maintain his considerable wealth”.

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Abramovich, Chelsea and Cyprus – how a small European country powered the Kremlin’s financial machine

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Abramovich and Chelsea

The project raises questions for the UK’s Chelsea Football Club over how Abramovich, its onetime owner, funded the club’s success.

The files reveal a decade-long pattern of payments worth tens of millions of pounds, routed through offshore vehicles belonging to Abramovich and apparently omitted from Chelsea’s financial accounts.

Three leading sports lawyers told ICIJ partner the Guardian that the payments may have broken UK league rules on financial fair play, of (FFP), aimed at preventing reckless spending that might put clubs’ future at risk.

Chelsea’s finances are already being probed by the Premier League, after the west London club’s new ownership regime voluntarily reported that “incomplete financial information” had been submitted during Abramovich’s tenure. The “Roman Empire,”, as some fans dubbed it, only fell when Russia’s 2022 invasion of Ukraine led to Abramovich being sanctioned by the UK and EU, ultimately forcing him to sell up.

The lawyers, who could not comment publicly due to concerns about conflict of interest, told the Guardian the transactions uncovered in the Cyprus Confidential files may have covered costs which that should have counted towards Chelsea’s spending limits, effectively allowing the club to spend more than it was permitted to.

They said some of the transactions may also have broken Premier League rules that require the submission of accurate accounts, a provision demanding that clubs act in good faith, as well as Football Association’s rules requiring disclosure of payments to agents.

The files also suggest that Abramovich secretly bankrolled efforts, ultimately unsuccessful, to overturn the rules through the courts, the Guardian reported.

Representatives of Roman Abramovich did not return requests for comment. A Chelsea FC spokesperson told the Guardian: “These allegations pre-date the club’s current ownership. They are based on documents which the club has not been shown and do not relate to any individual who is presently at the club.”

Cyprus and Russian money

The investigation revealed how Cyprus plays an even bigger role than was commonly known in moving dirty money for Russian president Vladimir Putin’s autocratic regime and other brutal dictators and anti-democratic actors.

ICIJ and its media partners examined 3.6 million leaked documents from six financial service providers based in Cyprus and a Latvian company as part of the project. The Cypriot firms are ConnectedSky, Cypcodirect, DJC Accountants, Kallias & Associates, MeritKapital and Meritservus. The Latvian company, Dataset SIA, maintains a website, i-Cyprus, through which it sells information about Cyprus-based companies, including Cypriot corporate registry documents.

The Meritservus and MeritKapital records were obtained by the whistleblower website Distributed Denial of Secrets. Leaked records from Cypcodirect, ConnectedSky, i-Cyprus and Kallias & Associates were obtained by Paper Trail Media. In the case of Kallias & Associates, the documents were obtained from Distributed Denial of Secrets, which shared them with Paper Trail Media and ICIJ. DJC Accountants’ records were obtained by the Organized Crime and Corruption Reporting Project (OCCRP). The partner organisations shared all the leaked records in the project with ICIJ, which structured, stored and translated them from several languages before sharing them with the wider partnership.

Underpinning the project is ICIJ’s data analysis that illustrates Cyprus’s indispensable role in moving oligarch wealth either to be hidden outside Russia as yachts, real estate and financial instruments, reinvested in Russia or used to undermine democratic institutions in the West.

Cypriot professional service firms were working on behalf of 25 Russians who came under western or Ukrainian sanctions after Russia’s 2014 annexation of Crimea and war in Donbas and an additional 71 Russian clients who have come under sanctions since February 2022, bringing the total to 96 sanctioned individuals.

Among the sanctioned Russian clients, ICIJ identified 44 politically exposed people – public officials, their relatives or others linked to state-owned companies or organisations deemed to merit extra scrutiny because of a heightened risk involving corruption or other illicit activity. What’s more, among the 104 Russian billionaires whom Forbes magazine identified in 2023, two-thirds – 67 individuals – also appear in Cyprus Confidential documents, along with their family members, as clients of the island’s professional service providers.

All told, ICIJ found nearly 800 companies and trusts registered in secrecy jurisdictions that were owned or controlled by Russians who have been sanctioned since 2014. (Secrecy jurisdictions are countries and territories that provide a low-tax regime and corporate ownership anonymity, limit access to company documents and can be more lenient towards financial crime.) The analysis showed the professional firms also worked for Russian-controlled companies registered in the British Virgin Islands, Jersey, the Isle of Man, Liechtenstein, Hong Kong and elsewhere. While many of the registered entities are shell companies with no employees or operations, some are subsidiaries of industrial giants – such as steelmaker Evraz, which supplies most of the railway track that Russia uses to transport arms and ammunition to its troops in Ukraine.

The most recent records are dated April 2022 (with a few incidental records dated afterwards), so they don’t show whether any of the providers continued to work with clients subject to Western sanctions since then.

Taken together, the project’s 3.6 million documents – despite representing a small fraction of Cyprus’s offshore industry records – reveal the EU member state to have been a massive financial hub for Putin’s Russia. The documents also provide a glimpse into the oligarchs’ lavish lifestyle – their superyachts, their priceless art collections of Matisse, Monet and Lucien Freud, and their private concerts featuring famous rock stars such as the Red Hot Chili Peppers.

PwC and Alexey Mordashov

The investigation reveals how global accounting giant PwC, formerly known as PricewaterhouseCoopers, helped Alexey Mordashov, one of Russia’s richest industrialists, transfer a $1.4 billion investment out of his name on the day after he was targetted by Western sanctions. The Cypriot ministry of finance is aware of the share transfers, and a criminal investigation is under way, a ministry official told ICIJ in November.

Around the same time, PwC Cyprus helped transfer another $100 million for a pair of Russian oligarchs whom the UK would soon declare part of the “cabal of selected elite” helping Putin wage his war on Ukraine.

In all PwC Cyprus worked with at least 12 of the 25 Russians who were already subject to sanctions by Western governments or Ukraine after Russia’s 2014 annexation of Crimea and the war in Donbas. But it took PwC until a few months after Russia’s 2022 invasion of Ukraine to announce it was leaving Russia and ordering its affiliates to cease working for sanctioned clients. “Any sanction on specific Russian entities or individuals that is passed anywhere in the world will be applied everywhere in the world,” the accounting firm stated on its website.

The project reveals that PwC Cyprus partners who left the firm to form a new provider also took over the administration of companies controlled by the pair of oligarchs the UK listed among Putin’s “cabal”. The firm, called Kiteserve, had office space in the same building as PwC’s offices in Limassol, Cyprus. Kiteserve only severed ties after the UK sanctioned the pair last year.

Abacus Ltd and Petr Aven

Another Cypriot firm founded by former PwC partners, Abacus Ltd, is at the centre of a legal dispute involving Russian billionaire Petr Aven. Filed by the UK’s National Crime Agency, which oversees international financial investigations, the civil case accuses Aven of evading sanctions by using Abacus and European banks to shunt wealth beyond the reach of Western sanctions. The previously unreported court records were obtained through a court petition by Spotlight on Corruption, a UK non-profit organisation, and shared with ICIJ. The separate, and larger, Cyprus Confidential leak provides a broad view of Aven’s wealth and Abacus’s central role in managing it.

Aven, who helped build Alfa Group into one of Russia’s largest financial conglomerates, was named in the 2019 Mueller Report on Russian interference in the 2016 US presidential election as offering to act as an intermediary between Putin and Donald Trump’s 2016 presidential transition team. Aven was among the oligarchs called to a meeting by Putin in the Kremlin on February 24th, 2022 – the day Russia invaded Ukraine. Alfa Group was later reported to be providing insurance to the Kalashnikov arms-making conglomerate and the Russian armed forces during the war.

In addition Abacus provided services to another 60 Cyprus-registered companies owned or controlled by other Russian oligarchs over the years, often in tandem with PwC.

Demetris Ioannides and Meritservus

The UK has accused a prominent Cypriot corporate services provider, Demetris Ioannides, of having “knowingly assisted sanctioned Russian oligarchs to hide their assets in complex financial networks”.

The ICIJ data analysis shows Ioannides’s firm, Meritservus, handled the day-to-day business of more than 100 Cyprus-registered companies and trusts owned or controlled by Russian oligarchs, including Kremlin propagandist Konstantin Malofeyev, who was already the subject of Western sanctions.

Cyprus Confidential records reveal that Meritservus had an extensive relationship with one of Russia’s most prominent oligarchs, Roman Abramovich. A billionaire long based in the UK, Abramovich in some ways typified Western elites’ embrace of Putin’s oligarchy. Worth about €8.5 billion, Abramovich has been a member of Putin’s inner circle since the late 1990s. He became widely known in the West for his fleet of yachts and as the long-time owner of Chelsea Football Club.

Meritservus helped administer no fewer than 14 Cyprus-registered trusts owned or controlled by Abramovich. Sometimes, the work was done in tandem with the Cyprus branch of accounting giant Deloitte, which Ioannides had founded earlier in his career. Meritservus also provided services to Abramovich companies registered in secrecy jurisdictions including the Isle of Man, Jersey and, mostly, the British Virgin Islands, where the bulk of Abramovich-owned companies – nearly 100 – were registered, ICIJ found. Cyprus Confidential also shows that an Abramovich-controlled entity sold a highly profitable stake in an advertising company to an entity controlled by Sergey Roldugin. A classical cellist and long-time friend of Putin, Roldugin was exposed in the Panama Papers as a major figure in a network that moved over $2 billion through banks and shell companies. The US Treasury sanctioned Roldugin in June 2022, describing him as a “custodian of President Putin’s offshore wealth”.

Dealing with Syria

The investigation exposes detailed discussions between Syria’s state-owned oil company and a Cyprus-registered intermediary about purchasing drilling equipment made by the Houston-based manufacturer NOV Inc.

It presents evidence that the Syrian Petroleum Company and a Cyprus intermediary prepared to conduct at least five transactions between 2014 and 2019 to obtain NOV equipment.

SPC is owned by Syria and controlled by the government of Bashar al-Assad. The US , in 2011, imposed a strict ban on exports to Syria, specifically naming SPC in the sanctions.

New York Stock Exchange-listed NOV stated in a 2017 securities filing that it had exited business with Syria at least three years earlier. Documents show HA Cable and the SPC continued to discuss purchases of NOV equipment to Syria after that date. The documents were obtained from Demetrios A Demetriades LLC, a Cypriot law firm appearing in ICIJ’s 2021 Pandora Papers project and now revisited as part of the Cyprus Confidential investigation.

In June 2014 correspondence, SPC wrote to HA Cable saying that it was getting in touch to buy parts “of American origin” at the suggestion of “National Oilwell Varco”, as NOV was known at the time. Two years later, SPC said that it was directing a query about acquiring NOV equipment to HA Cable “due to USA sanction [sic] imposed on Syria”. In 2019, the Syrian company urged HA Cable to buy NOV pumps and drawworks “as soon as possible”. NOV Inc’s chief compliance officer, Brent Benoit, told ICIJ in an email that the company reviewed its transactions and found no evidence that NOV was involved in any sales to HA Cable Export during the period in which the discussions between HA Cable and the SPC occurred. He did not address a question about the letter the SPC said in 2014 it had received from NOV referring it to HA Cable Export.

With the help of Russia, Iran and a steady flow of oil revenue, Assad has since turned the tide in Syria’s civil war in his favour.

Putin’s author

Among the many westerners who have built a career explaining Russia and its autocratic leader is Hubert Seipel, a German journalist, author and television personality. He forged his brand by touting his unparalleled access to the Russian president, promoting images of them hunting deer together in Siberia and cruising through Moscow in the back of a limousine. The portrayals that Seipel turned out were decidedly sympathetic but also won him awards and accolades for depicting Russia as something other than a world menace. Leaked documents from a Cypriot financial service provider reveal that, in 2018 and 2019, Seipel received two payments totalling about $700,000 as “sponsorship” from a shell company linked to Mordashov. A lawyer working for Mordashov’s steel conglomerate, Severstal, served as a witness to the agreement on behalf of the sponsor, the records show.

A handwritten note on a 2018 document says the sponsorship was “for writing a book on [the] political environment in the Russian Federation”. Another note on the same record referred to a 2013 agreement for a “Putin biography”. The author published a German-language book whose title translates to Putin: Inner Views of Power two years later.

Over the years, Germany’s media and publishing industries have also sung Seipel’s praises and declared him to be one of the country’s leading analysts of Russia.

Seipel has vehemently denied being on the Kremlin’s payroll. When pressed on the matter during a 2021 radio interview, he replied with an emphatic “No!”

In response to questions from Paper Trail Media, Seipel acknowledged Mordashov’s “support” for his books but defended his work as unbiased. “[N]o specific factual errors were found in any of the books,” he said.

Records show that the payments to the journalist were prepared by Cypcodirect and PwC Cyprus.

Contributors: Spencer Woodman, Matei Rosca, David Kenner, Dean Starkman, Tanya Kozyreva, David Rowell, Whitney Joiner, Fergus Shiel, Delphine Reuter, Karrie Kehoe, Jelena Cosic, Jesus Escudero, Agustin Armendariz, Miguel Fiandor, Denise Ajiri, Emilia Diaz-Struck, Scilla Alecci, Brenda Medina, Eve Sampson, Richard HP Sia, Kathleen Cahill, Angie Wu, Tom Stites, Hamish Boland-Rudder, Joanna Robin, Carmen Molina Acosta, Hans Kobersteinz (ZDF), Bastian Obermayer, Frederik Obermaier and Timo Schober (Paper Trail Media/Der Spiegel), Kira Zalan (OCCRP), Luc Caregari