Deloitte Allegedly Aid Falsified Documents to Conceal Abramovich Wealth

A joint investigation by BBC Panorama and the Bureau of Investigative Journalism has uncovered that Deloitte, the world’s largest accountancy firm, assisted in falsifying documents to conceal Russian oligarch Roman Abramovich’s wealth and avoid tax liabilities.

Records signed off by Deloitte’s Cyprus office indicate that assets valued at $672m (£508m), including superyachts, private jets, and mansions, were removed from Abramovich’s company accounts through backdated paperwork.

Andrew Mitchell KC, a barrister specializing in financial services law, described the evidence as demonstrating “straightforward” tax evasion. He stated the scheme was “blatant” and noted that if similar activities occurred in the UK, they would likely prompt prosecution by His Majesty’s Revenue and Customs.

The findings emerge from a leak of thousands of documents detailing the operations of a network of offshore companies administered from Limassol, Cyprus, between 1995 and 2022. The files were shared as part of the International Consortium of Investigative Journalists’ Cyprus Confidential investigation, involving media partners such as the Guardian and the Organised Crime and Corruption Reporting Project.

Until 2005, Deloitte owned MeritServus, the corporate services firm managing Abramovich’s empire. After the split, the two entities continued to work closely with the oligarch’s associates.

According to the investigation, when Cyprus introduced a transparency law in 2006 requiring company accounts to be public, Abramovich’s team sought to circumvent the new regulations. Deloitte Cyprus reviewed and approved backdated documents that falsely claimed a transfer of assets to a British Virgin Islands (BVI) parent company had occurred in 2003. Consequently, when the 2003 accounts were signed in 2006, the luxury properties and vessels disappeared, leaving only $75,000 in reported assets.

Lord Sikka, professor of accounting at the University of Sheffield, criticized the actions as a “violation of a statutory duty” and termed the misrepresentation of transaction dates “pretty scandalous.”

The inquiry also identified a separate scheme involving Kravin Investments, a Cypriot company holding nearly $2bn in 2003. Emails from MeritServus indicate that after a meeting with Deloitte, a plan was devised to alter financial statements for 2003 and 2004. This involved creating backdated records to show the company was merely holding funds on behalf of its BVI parent, thereby eliminating its tax liability in Cyprus.

A third instance involved Electus Investments, which held over $10bn. MeritServus backdated documents to suggest beneficial ownership had transferred to a BVI entity in November 2003, masking the true value of the Cypriot company’s assets.

Abramovich’s lawyers denied any wrongdoing, asserting that the oligarch does not evaded tax or concealed his fortune. They argued that Panorama provided no evidence Abramovich knew about, authorized, or directed the falsification of documents, maintaining that relying on professional advice was legitimate. They also characterized the ongoing Jersey criminal investigation as politically motivated.

Deloitte Cyprus stated it acts in compliance with applicable laws and declined to comment on the specific allegations due to the age of the documents. The firm noted that the documents were more than 20 years old and no longer accessible.

Abramovich, who purchased Chelsea Football Club in 2003, was sanctioned by the UK government in 2022 following Russia’s invasion of Ukraine. He has been reported to reside in Turkey, while £5.4bn of his assets remain frozen in Jersey.