The world’s biggest accountancy firm helped in falsifying documents to hide Roman Abramovich’s wealth and evade tax, BBC Panorama has found.
Accounts signed off by Deloitte in Cyprus meant assets such as superyachts, mansions and private jets worth $672m (£508m) vanished from Abramovich’s company accounts.
Deloitte also appears to have advised on a scheme to evade a huge tax bill on the oligarch’s wealth through the falsification of documents.
Barrister Andrew Mitchell KC, an expert in financial services law, said Panorama’s evidence showed the scheme was “straightforward” tax evasion and “it couldn’t be more blatant”.
Deloitte Cyprus said it “acts in compliance with applicable laws”.
The findings are being revealed following a joint investigation between BBC Panorama and the Bureau of Investigative Journalism.
For nearly two decades, Roman Abramovich was the most famous Russian oligarch in the UK, welcomed in London where he bought Chelsea Football Club in 2003 and bankrolled the club’s most successful period. But after Russia’s full-scale invasion of Ukraine in 2022, he was sanctioned by the UK government as an associate of President Vladimir Putin and forced to sell the club.
Abramovich has been reported to be living in Turkey, a safe haven for him because it did not apply sanctions. In the Channel Island of Jersey, £5.4bn of his assets remain frozen and a criminal investigation has been going on for four years.
The oligarch’s lawyers told the BBC he denies the allegations in the Jersey investigation and says it was “undertaken for political purposes”.
Our investigation has uncovered new evidence about the way Abramovich’s business empire has been run. It also raises serious questions about the integrity of some of his professional advisers.
Getty ImagesThe evidence is contained in a leak that includes thousands of documents about the oligarch’s finances and the operations of a network of offshore companies administered from Cyprus – which used to be a tax haven popular with Russians – between 1995 and 2022.
The BBC and media partners including the Guardian, Paper Trail Media, the Organised Crime and Corruption Reporting Project, and the Cyprus Investigative Reporting Network – as well as the Bureau of Investigative Journalism – have been reporting on the leaked files since 2023 as part of the International Consortium of Investigative Journalists’ Cyprus Confidential investigation.
In 2022, Panorama also reported on how Abramovich had made his fortune from a corrupt deal to buy a Russian state-owned oil company in the 1990s, selling it back to the government a decade later for billions in profit. He has previously said allegations of corruption in the deal are false.
The profits from Abramovich’s oil deals in Russia were funnelled into a web of offshore companies. They were administered from Cyprus by a corporate services firm called MeritServus, in Limassol, the island’s second-largest city.
Until 2005, Deloitte – now the biggest of the “big four” firms which dominate the accounting industry – owned MeritServus. After they split, the two companies worked closely together with Abramovich’s associates to manage his global fortune.
The leaked documents from MeritServus reveal some of their practices.
Our first example of backdated paperwork comes in 2006, after a new law in Cyprus meant that company accounts had to be made public. The new transparency law threatened to expose the secrets of Abramovich’s vast wealth.
Deloitte Cyprus had prepared draft accounts for 2003 – but had not yet finalised them – for his Cypriot company Amiscan Investments. The accounts detailed $672m of luxury property.
A mansion in West Sussex, a luxury flat in London and an estate in the south of France were all included – plus helicopters, private jets and a small fleet of boats the oligarch owned at the time, including the $147.5m Pelorus.
To keep them secret, Abramovich’s associates and Meritservus decided to rewrite history. They drew up a plan to circumvent the transparency law by transferring the assets to Amiscan’s parent company in the British Virgin Islands (BVI), where they could be kept hidden. And they backdated the change by three years to make it look like the asset transfer had happened in 2003.
Deloitte Cyprus reviewed the backdated documents and said they were “adequate” to allow them to remove the assets from Amiscan’s accounts.
When the 2003 accounts were signed off by Deloitte in 2006, the homes, planes and yachts disappeared at the stroke of a pen. Only $75,000 of assets remained.
Deloitte signed off the accounts even though the leaked documents show it knew they were completely misleading.
Lord Sikka, professor of accounting at the University of Sheffield, said it was a “violation of a statutory duty” and “pretty scandalous” to misrepresent transaction dates and not to publish true and fair accounts.
Panorama also found evidence that backdated documents had been used in a tax evasion scheme.
This involved another one of Abramovich’s Cypriot companies, Kravin Investments, which had almost $2bn in the bank in 2003.
It had been earning large amounts in interest, so Roman Abramovich’s company should have been paying tax on that interest to the Cypriot authorities.
But his advisers had another idea to rewrite history.
An email from MeritServus in August 2005 to Abramovich’s Russian associates said a plan had been devised after 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 read.
MeritServus informed the oligarch’s Russian associates, that Kravin’s “Provisional Tax Assessments for 2005” would be filed showing the company earning no income from the money.
A month later, an associate in Russia emailed in response, “I agree”.
MeritServus then created a series of backdated documents which falsely purported to show that 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.
Deloitte wrote in a September 2005 email that “certain changes will have to be made to the accounts (bank account balances, interest income, profit and loss account)” because of the backdated changes to Kravin’s assets.
So Deloitte was apparently advising on the falsification of financial records. The evidence suggests it allowed Abramovich’s company to evade millions in tax.
Andrew Mitchell KC told us the scheme was “straightforward” tax evasion. “If it happened in England and it was in the millions, His Majesty’s Revenue and Customs would be thinking about a prosecution,” he said.
Cypriot MP Christos Christofides said that if tax had been evaded, then “we have to see how we can get our money back and how, if some people are guilty, they have to pay the price according to our law.”
In addition to the documents which Deloitte helped to backdate, Abramovich’s advisers at MeritServus falsified a third set of records. This involved the oligarch’s huge business fortune – more than $10bn – held by a company called Electus Investments in Cyprus.
MeritServus backdated documents to make it look like Electus did not own the fortune.
It used another Abramovich company with exactly the same name of Electus Investments, but this time based in the more secretive BVI, where accounts did not have to be made public.
Emails show that in 2006, MeritServus acknowledged that the fortune was owned by Electus Cyprus. But again it proposed to rewrite the past, this time “to transfer the beneficial ownership to Electus Investments in the BVI” and make it look as though the change had happened three years earlier.
MeritServus signed and backdated documents which falsely purported to show the BVI company had owned the $10bn fortune since 20 November 2003. So when the accounts of the Cypriot company with the same name were made public, it appeared to have assets worth just $145,000.
Roman Abramovich’s billions had been made to disappear.
Andrew Mitchell KC told Panorama: “What you take away from it is there are professionals who are prepared to bend and break the rules of their profession and therefore the law. And it looks that they will stop literally at nothing in terms of creating documents.”
Vladimir Milov, Russia’s deputy minister of energy as Abramovich built his empire and now a critic of the Russian government, said: “For each Russian oligarch or Middle Eastern or African corrupt oligarch, there’s an army of Western financial and legal services and PR services providers, who is easily taking money for whitewashing their reputation and making them look normal.”
Denying any wrongdoing by the oligarch, Roman Abramovich’s lawyers said that 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.
MeritServus closed following the Cyprus Confidential leak.
