A money trail of a $40 million secret deal associated with Roman Abramovich, a Russian oligarch and -believed- close friend of Russia President Vladimir Putin, has been traced to Cyprus.
Despite being sanctioned by the UK and EU, Abramovich, a sanctioned Russian billionaire and former owner of Premier League side Chelsea, has consistently denied any financial ties to Putin.
However, the latest revelations have Abramovich in cahoots with two Russian businessmen, acting as ‘wallets’ to Putin, helping to hide the Russian leader’s true assets.
BBC Newsnight, BBC Verify and Panorama partnered with the Bureau of Investigative Journalism to uncover the revelations as part of Cyprus Confidential – a global investigation led by reporters at the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media.
Leaked documents from Cyprus shed light on a covert 2010 deal involving the transfer of shares in the lucrative Russian advertising company Video International.
This transaction, facilitated by companies ultimately owned by a trust connected to Abramovich, appeared to undervalue the shares.
The recipients of these shares were two individuals termed “wallets” for President Putin, Sergei Roldugin and Alexander Plekhov, who subsequently received substantial dividends.
Confidential records identify Roldugin, a close friend of Putin and the artistic director of the St Petersburg Music House, as one participant in the secret deal.
Roldugin is the godfather of Putin’s first daughter, Maria.
The second individual, Plekhov, a biochemist-turned-businessman and close associate of Putin, is also implicated.
Both Roldugin and Plekhov have faced accusations of being conduits for Putin, secretively managing money and assets on his behalf.
Swiss prosecutors alleged they were “straw men” and not the true owners of assets in bank accounts related to the Video International deal.
The intricate web of companies in Cyprus and the British Virgin Islands, along with a trust, concealed Abramovich’s involvement in the transaction.
Leaked documents unveil Abramovich’s association with two companies, Finoto Holdings and Grosora Holdings, which purchased a combined 25% stake in Video International in 2003.
These companies, ultimately owned by the Sara Trust Settlement with Abramovich as an ultimate beneficiary, acquired their stakes at a seemingly undervalued price in 2003.
Each company bought a 12.5% stake in the Russian advertising giant in September 2003 for the same price, about $130,000 each.
The price paid was “ridiculous”, says Vladimir Milov, a former energy minister in Putin’s first term and now a vocal opposition leader.
“That stake was clearly worth much more by many orders of magnitude.”
Despite Video International’s significant position in the Russian TV advertising market, with ties to the Kremlin administration, Finoto and Grosora sold their investments in 2010 at a price below fair market value.
Finoto’s stake was sold to Med Media Network, a company linked to Roldugin, while Grosora’s stake was sold to Namiral Trading Ltd, later associated with Plekhov.
The revelations were part of a wider investigation by the ICIJ highlighting the intricate manoeuvres within the Cyprus-based financial network that have been instrumental in concealing such transactions.
Drawing from a pool of 3.6 million leaked documents spanning six firms in Cyprus, the investigation encompasses data primarily from the mid-1990s to April 2022, just two months after the Russian invasion of Ukraine.
Russia’s invasion of Ukraine in February 2022 prompted Western governments to impose sanctions on numerous Russian billionaires. (source BBC)