Paradise Papers: Usmanov, Milner, Sechin's ex-Wife and the US Minister
November 5, the International Consortium of Investigative Journalists (ICIJ) came out with an investigation based on an analysis of the archives of Appleby company located in Bermuda. It is one of the world’s largest companies specializing in offshore registration. After the famous Panama Papers, Appleby’s documents became the largest leak.
382 journalists from 67 countries have been studying materials of offshore companies. The result of their work is a project called the Paradise Papers. Novaya Gazeta represented Russia in this project. Russiangate tells about offshore companies belonging to Russian officials.
Sechin's ex-wife and the malls
In 2011, the head of Rosneft, Igor Sechin, divorced his wife Marina. According to declarations for 2008-2010, his spouse did not receive any income during this period. However, she suddenly earned 9 million rubles during their divorce. In 2012, with the help of Appleby, she registered S Holdings Ltd. The company was founded for investments in development projects of Julius Meinl (owner of the Austrian company Julius Meinl and Gray Jackal Limited).
Sechina was expected to invest in another company, Fulcrum, through Gray Jackal Limited. In addition, she possesses two malls: one is under construction and located in Perm, Russia; the other is in Ufa, also Russia. There is no data on the sums of her investments in the company available, yet Fulcrum mentioned €40–80 during their presentation. No one in Appleby draw attention to the origin of this money before Sechina turned out to be a 'politically significant person'. So, her company was replaced with another in the chain of financing projects of Julius Meinl.
Milner, Usmanov and Facebook
Milner and Usmanov bought Facebook shares via offshores. They used a state company’s funds to make the purchase. Alisher Usmanov, being the Head of the Gazprom Investholding, issued a loan for $920 million to Kanton Services. In 2009, the company invested in a fund of Yuri Milner, who bought a 10% stake in Facebook. Three years later, when the social network offered its shares through open exchange trade, the businessmen sold a block of shares for $1.6 billion. Net profit from the deal amounted to more than $500 million.
Usmanov denied using the state funds for buying the assets after the investigation came out.
The journalists also found out that some wealthy Russian businessmen and officials prefer to register their private jets in offshores. They do this in order not to pay VAT when importing them to Europe. This scheme was used by Arkady and Boris Rotenbergs, Oleg Tinkov, Oleg Deripaska, Olga Shuvalova (her notorious jet for transportation of corgis - ed.), as wells as former senators Vadim Moshkovich, Vitaly Malkin, ex-deputy Alexander Skorobogatko, Russian Railways contractor Yuri Korotchenko, owner of the Putin's palace Alexander Ponomarenko.
To purchase a jet, officials use a chain of companies. A company in the British Virgin Islands becomes an official owner of an aircraft. It opens a branch in the Isle of Man. This branch is officially registered as a taxpayer in the island, and then imports an aircraft to Europe. A plane is rented by another company in Cyprus. This scheme makes it seem that a real owner does not officially own a plane.
The Isle of Man is a popular link in the chain due to a loophole in tax legislation that allows to transport a plane to Europe without paying a value-added tax.
In total, journalists found 17 charters belonging to Russian clients for a total sum of 25 billion rubles. With the help of offshore companies, owners of aircrafts did not pay 4.5 billion rubles of taxes.
Roman Abramovich, Communist MP, and Putin's classmate
Russian businessman Roman Abramovich appears in Paradise Papers as "an unsuccessful buyer." In 2008, the oligarch tried to buy a share in Bermuda's Russia Forest Products. However, he was not able to do this at first. In a special registration questionnaire, Abromovich claimed that he had never been involved in a criminal case. However, in 1992, the businessman was a defendant in a criminal case over kidnapping a train with diesel fuel. This fact became a basis for termination of the transaction. Later Abramovich bought the assets, but through offshore in British Virgin Islands.
Vladimir Blotsky, Russian Parliament member of the Communist Party, turned out to be the CEO of Blackfil S.A Uruguayan company, while his relatives were connected with the company. A firm under the same name is registered in the Czech Republic. Blotsky has been an owner of the company since 2006. A week before the elections, the future MP made his father the owner of the company, so avoiding mentioning the foreign asset in his pre-election declaration. Yet an annual income of 329 million rubles was still declared.
Nikolai Egorov was a classmate of Vladimir Putin. In 2015, he bought 20% of the Antipinsky Refinery (ANPZ), the largest private oil refinery in Russia. Egorov also used services of Appleby to conduct the transaction through offshore.
The US Commerce Secretary and Putin's son-in-law
Trump's associate and the US Commerce Secretary, Wilbur Ross, has a fortune of $2.5 billion. The investigation revealed that he owns 31.5% of Navigator Holdings Ltd. through offshore.
As it turned out, one of the largest customers of this company is the Russian petrochemical holding Sibur. The holding is owned by Kirill Shamalov, husband of Katerina Tikhonova - an alleged daughter of the Russian president. Among the shareholders is a friend of Putin, businessman Gennady Timchenko. Both entrepreneurs are under US sanctions. Representatives of the US minister said that Ross had invested in the company before he started working with Russian partners, and he never met with the owners of Sibur.