Deloitte Accused of Aiding Abramovich Tax Evasion Scheme

Accountancy giant Deloitte allegedly assisted Roman Abramovich in concealing assets, including yachts, mansions, and private jets, through the falsification and backdating of financial documents to evade millions in taxes. This is according to a BBC Panorama investigation that reviewed leaked documents.

Abramovich's legal team denies any wrongdoing, stating that he relied on professional advice. The documents indicate that advisors at MeritServus, a corporate services firm then owned by Deloitte, shifted Abramovich's estimated £7.5 billion ($10 billion) business fortune from a Cypriot company to a British Virgin Islands entity. The transfer documents were allegedly backdated to appear as if they occurred before new transparency rules took effect in Cyprus in 2006, a move that would have made the company's published accounts show only £110,000 ($145,000) in assets.

Following a split, Deloitte and MeritServus reportedly continued to collaborate on managing Abramovich's global wealth. Lord Sikka, an accountancy professor and Labour peer, described the alleged actions as a "fiddle factory," where transactions were manipulated and backdated to conceal assets and violate statutory duties of truthful accounting.

Further leaked documents reportedly show that £507 million ($672 million) in luxury property, including a London flat, a French estate, and the yacht Pelorus, owned by Abramovich through another Cypriot company, Amiscan Investments, was also allegedly hidden. The properties were reportedly removed from published accounts via a purported transfer to a British Virgin Islands company and then backdated by three years.

Separately, it is alleged that Abramovich's advisors used a company called Kravin Investments to evade tax. Leaked documents suggest that earlier records were altered to make it appear that Kravin did not own nearly £1.5 billion ($2 billion) in assets, thereby avoiding taxable interest income. An email from MeritServus to Abramovich's associates in 2005, following a meeting with Deloitte, proposed changing financial statements and accounting records for 2003 and 2004 to reflect this. An associate in Russia reportedly agreed to the plan a month later.

Banking lawyer Andrew Mitchell KC described such actions as a "straightforward and blatant move to protect from legitimate taxation assets which should otherwise have been subject to tax." He suggested that such activities, if occurring in England involving millions, would likely prompt prosecution by His Majesty's Revenue and Customs.

Abramovich, the former owner of Chelsea FC, was sanctioned after Russia's invasion of Ukraine, amidst claims of a close relationship with Russian President Vladimir Putin, which Abramovich has denied. He is reportedly residing in Turkey. Deloitte Cyprus stated it could not comment on the specific allegations due to the age of the documents and their inaccessibility.