The world’s largest accountancy firm helped falsify documents to hide Roman Abramovich’s wealth and evade tax, according to a joint investigation by a British broadcaster and a journalism organisation. Accounts signed off by Deloitte in Cyprus show assets including superyachts, mansions and private jets, worth $672m (£508m), disappearing from the Russian billionaire’s company accounts.
The investigation also says Deloitte appears to have advised on a scheme to evade a large tax bill on the oligarch’s wealth through the falsification of records. Abramovich, who bought Chelsea Football Club in 2003, was sanctioned by the UK government in 2022 as an associate of President Vladimir Putin and was forced to sell the club. His lawyers say he denies evading tax or concealing his fortune.
Backdated accounts made $672m of assets disappear
The findings are based on a leak of thousands of documents about the oligarch’s finances and a network of offshore companies administered from Cyprus between 1995 and 2022. The investigation says the trail begins in 2006, when a new Cypriot law required company accounts to be made public. The law threatened to expose the scale of Abramovich’s holdings.
According to the investigation, Deloitte Cyprus had prepared draft accounts for 2003 for his Cypriot company Amiscan Investments but had not finalised them. Those accounts listed $672m of luxury property, including a mansion in West Sussex, a London flat, a estate in the south of France, helicopters, private jets and boats, among them the $147.5m Pelorus. The investigation says the assets were moved to Amiscan’s parent company in the British Virgin Islands and the transfer was backdated by three years to make it appear it took place in 2003.
Deloitte Cyprus reviewed the backdated documents and described them as “adequate” to remove the assets from Amiscan’s accounts. When the 2003 accounts were signed off in 2006, only $75,000 of assets remained. The investigation says the leaked documents show Deloitte knew the accounts were completely misleading.
Lord Sikka, professor of accounting at the University of Sheffield, told the investigators that misrepresenting transaction dates and failing to publish true and fair accounts was a “violation of a statutory duty” and “pretty scandalous”.
Alleged tax evasion through Kravin Investments
The investigation also points to another Cypriot company, Kravin Investments, which held almost $2bn in the bank in 2003 and earned large amounts of interest. Its owner should have paid tax on that interest to the Cypriot authorities, but the investigation says Abramovich’s advisers devised a different approach.
An email from MeritServus, the Limassol-based corporate services firm that administered the companies, to Abramovich’s Russian associates in August 2005 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 said. A month later, an associate in Russia replied, “I agree”.
According to the investigation, MeritServus then created backdated documents that falsely suggested Kravin was only holding and investing the funds on behalf of its parent company. A Deloitte email from September 2005 said “certain changes will have to be made to the accounts” because of the backdated changes. The investigation concludes that Deloitte was apparently advising on the falsification of financial records, and that the evidence suggests the arrangement allowed the company to evade millions in tax.
Barrister Andrew Mitchell KC, an expert in financial services law, described the scheme as “straightforward” tax evasion. “It couldn’t be more blatant,” he said. He added that if such conduct had happened in England involving millions, His Majesty’s Revenue and Customs would be considering a prosecution. Cypriot MP Christos Christofides said that if tax had been evaded, authorities would need to recover the money and hold any guilty people to account under Cypriot law.
Electus Investments fortune and responses from the parties
A third set of records, according to the investigation, concerned a business fortune of more than $10bn held by a company called Electus Investments in Cyprus. The investigation says MeritServus backdated documents to make it appear the fortune was not owned by that company. It used a British Virgin Islands company with the same name, where accounts did not have to be made public.
Emails show that in 2006 MeritServus acknowledged the fortune was owned by the Cypriot Electus, but proposed rewriting the past by transferring beneficial ownership to the BVI company and dating the change three years earlier. The signed and backdated documents, the investigation says, falsely showed the BVI company had owned the fortune since 20 November 2003. As a result, the accounts of the Cypriot company made public appeared to show assets worth just $145,000.
Mitchell told the investigators that some professionals were prepared to “bend and break the rules” of their profession and the law. Vladimir Milov, a former Russian deputy minister of energy and now a critic of the Russian government, said that for each corrupt oligarch there was “an army” of Western financial and legal service providers “easily taking money for whitewashing their reputation”.
Abramovich’s lawyers said he denies evading tax or concealing his fortune. They said the investigation provided no evidence that he knew about, authorised or directed the falsification of any document. They said he was “not involved in the day-to-day operation of those companies” and that relying on professional advice was “entirely proper and legitimate”. Deloitte Cyprus said it “acts in compliance with applicable laws” but could not comment on the specific allegations because the documents were more than 20 years old and no longer accessible. MeritServus closed following the leak.
