Deloitte Accused of Aiding Abramovich Tax Evasion Scheme
Leaked documents suggest accounting giant Deloitte helped Roman Abramovich hide billions in assets to avoid tax.
Accountancy firm Deloitte allegedly assisted former Chelsea owner Roman Abramovich in falsifying documents to conceal the true extent of his wealth, potentially evading millions in taxes, according to leaked documents obtained by the BBC Panorama investigation and the Bureau of Investigative Journalism. The financial records are suggested to have been altered and backdated to shield the Russian billionaire's assets, which included luxury yachts, mansions, and private jets.
Abramovich's legal representatives have denied any wrongdoing, stating that he relied on professional advice. The leaked documents indicate that financial advisors at MeritServus, a corporate services firm formerly owned by Deloitte, shifted approximately $10 billion of Abramovich's business fortune from a Cypriot company to a British Virgin Islands entity. This transfer was allegedly backdated to appear as if it occurred in 2003, before new transparency rules were enacted in Cyprus in 2006. Consequently, the Cypriot company's published accounts reportedly showed assets of only $145,000.
Lord Sikka, an accountancy professor and Labour peer, criticized the alleged actions, describing them as a "fiddle factory" where transactions were manipulated and backdated. He asserted that misrepresenting transaction dates violates statutory duties and constitutes a failure to provide truthful and fair accounts.
Further leaked documents reportedly reveal that $672 million in luxury properties owned by Abramovich through another Cypriot company, Amiscan Investments, were allegedly hidden. These assets included properties in West Sussex, London, and the south of France, along with supercars, helicopters, private jets, and the $147.5 million yacht Pelorus. Deloitte allegedly removed these properties from Amiscan Investments' accounts through a purported transfer to a British Virgin Islands company, which was then backdated by three years.
Another Cyprus-based company, Kravin Investments, is also implicated. The documents suggest that Abramovich's advisors helped him evade taxes by altering Kravin's records to make it appear that the company did not own nearly $2 billion in assets, thereby avoiding liability for taxable interest income. An email from MeritServus in 2005, referencing a meeting with Deloitte, proposed changing financial statements and accounting records for 2003 and 2004 to reflect this arrangement. An associate's reply indicated agreement a month later.
Banking and financial services lawyer Andrew Mitchell KC described the alleged actions as a "straightforward and blatant move to protect from legitimate taxation assets which should otherwise have been subject to tax." He noted that such actions, if conducted in England and involving millions, could lead to prosecution by His Majesty's Revenue and Customs.
Abramovich, who was sanctioned after Russia's invasion of Ukraine, has denied claims of a close personal relationship with Russian President Vladimir Putin. He is reportedly residing in Turkey, a country that has become a haven for Russian oligarchs due to its non-application of sanctions.
Deloitte Cyprus stated it could not comment on the specific allegations due to the age of the documents and their inaccessibility. Abramovich's lawyers maintained that he was not involved in the daily operations of the companies and that reliance on professional advice was legitimate.