Documents falsified to evade tax on Abramovich's wealth

ByJames Oliver, Rory Tinman, BBC Panorama and Simon Lock, the Bureau of Investigative Journalism.

Key points

• Accounts signed off by Deloitte in Cyprus meant assets such as superyachts, mansions and private jets worth $672m (£508m) vanished from Abramovich's firm accounts.
• When the 2003 accounts were signed off by Deloitte in 2006, the homes, planes and yachts disappeared at the stroke of a pen.
• MeritServus informed the oligarch's Russian associates, that Kravin's "Provisional Tax Assessments for 2005" would be filed showing the firm earning no income from the capital.
• Deloitte Cyprus had prepared draft accounts for 2003 – but had not yet finalised them – for his Cypriot firm Amiscan Investments.
• An email from MeritServus in August 2005 to Abramovich's Russian associates remarked a plan had been devised after a gathering with Deloitte.

Notably, the world's biggest accountancy firm supported in falsifying documents to hide Roman Abramovich's wealth and evade tax, BBC Panorama has identified.

Deloitte additionally appears to have advised on a scheme to evade a enormous tax bill on the oligarch's wealth through the falsification of documents.

Barrister Andrew Mitchell KC, an expert in financial services law, remarked Panorama's evidence demonstrated the scheme was "straightforward" tax evasion and "it couldn't be more blatant".

Roman Abramovich's lawyers remarked he denies that he evaded tax or concealed his fortune. They remarked Panorama provided no evidence he knew concerning, authorised or directed the falsification of any document and noted it was legitimate to rely on advice from professionals. Deloitte Cyprus remarked it "acts in compliance with applicable laws".

Meanwhile, the findings are being made public after a joint investigation between BBC Panorama and the Bureau of Investigative Journalism.

For almost two decades, Roman Abramovich was the most famous Russian oligarch in the UK, welcomed in London where he purchased 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 administration as an associate of President Vladimir Putin and forced to sell the club.

Abramovich has been documented to be living in Turkey, a safe haven for him as 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.

Meanwhile, the oligarch's lawyers informed the BBC he denies the allegations in the Jersey investigation and states it was "undertaken for political purposes".

Our investigation has uncovered new evidence regarding the way Abramovich's business empire has been run. It additionally raises serious questions concerning the integrity of some of his professional advisers.

Meanwhile, the evidence is contained in a leak that includes thousands of documents regarding the oligarch's finances and the operations of a network of offshore businesses administered from Cyprus – which applied to be a tax haven popular with Russians – between 1995 and 2022.

Notably, 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, external – have been reporting on the leaked files since 2023 as part of the International Consortium of Investigative Journalists' Cyprus Confidential, external investigation.

In 2022, Panorama additionally noted on how Abramovich had created his fortune from a corrupt agreement to purchase a Russian state-owned oil business in the 1990s, selling it back to the administration a decade afterwards for billions in profit. He has previously remarked allegations of corruption in the agreement are false.

For context, the profits from Abramovich's oil deals in Russia were funnelled into a web of offshore firms. 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 firms worked closely together with Abramovich's associates to manage his global fortune. The leaked documents from MeritServus reveal some of their practices.

After a new law in Cyprus meant that firm accounts had to be produced public, our first example of backdated paperwork comes in 2006. 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 firm Amiscan Investments. The accounts detailed $672m of luxury property.

Meanwhile, 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 firm in the British Virgin Islands (BVI), where they could be kept hidden. And they backdated the change by three years to create it look like the asset transfer had happened in 2003.

Deloitte Cyprus reviewed the backdated documents and remarked 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, remarked it was a "violation of a statutory duty" and "pretty scandalous" to misrepresent transaction dates and not to publish true and fair accounts.

Panorama additionally identified evidence that backdated documents had been applied in a tax evasion scheme.

This involved another one of Abramovich's Cypriot firms, Kravin Investments. It had almost $2bn in the bank in 2003.

It had been earning sizeable amounts in interest, so Roman Abramovich's business should have been paying tax on that interest to the Cypriot authorities. But his advisers had another idea to rewrite history.

In practice, an email from MeritServus in August 2005 to Abramovich's Russian associates remarked a plan had been devised after a gathering 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.

Meanwhile, a month afterwards, 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 firm in the BVI.

This created it look like Kravin did not actually own the capital, 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)" since 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 firm to evade millions in tax.

Andrew Mitchell KC informed 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 remarked.

According to Cypriot MP Christos Christofides, 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."

Along with the documents which Deloitte supported to backdate, Abramovich's advisers at MeritServus falsified a third set of records. This involved the oligarch's massive business fortune – more than $10bn – held by a business called Electus Investments in Cyprus.

MeritServus backdated documents to create it look like Electus did not own the fortune.

It applied another Abramovich business with exactly the same name of Electus Investments, but this time based in the more secretive BVI, where accounts did not have to be created 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 create it look as though the change had happened three years earlier.

For now, documents falsified to evade tax on Abramovich' s wealth remains the part of the story worth watching, and further updates are likely as more details are confirmed.