A consortium of journalists has for months attempted to penetrate offshore banking secrecy. The Huffington Post this AM features the findings to date.
First take-away: secret accounts are indeed very secret. It's hard for outsiders to learn much more about them than the fact that they exist.
The second take-away is a point I've been pounding here for some time: the corruption of the post-Soviet state is reaching deep into British financial and economic life - and British law invites this corruption to spread.
Vladimir Antonov fled permanently to Britain after his father, Alexander, was gunned down in a Moscow street in 2009. Another associate, German Gorbuntsov, narrowly survived a volley of shots in London last March.
When Antonov bought a luxury yacht in Antibes, the Sea D, he was careful to register its ownership to an anonymous British Virgin Islands (BVI) entity, Danforth Ventures Inc.
He also got his hands on enough cash to try to take over the ailing Swedish car manufacturer Saab, though he did not take control. He did succeed for a while in owning Portsmouth FC, the even more ailing British football club.
Antonov is currently on bail in Britain. Lithuanian authorities are trying to extradite him for allegedly looting their collapsed bank Snoras, which he denies.
The allegation that oligarchs exploit Britain’s offshore secrecy regime to shift assets out of their own countries is not an uncommon one. Another refugee from the law is the Kazakh billionaire Mukhtar Ablyazov, who was last seen in February allegedly heading out of London on a coach to France.
Ablyazov has been sentenced to 22 months in jail for contempt of a UK court as the BTA Bank in Kazakhstan attempts to pursue his maze of offshore assets. The bank’s lawyers claim Ablyazov, who denies it, has made off with an astonishing £4 billion using BVI and Seychelles companies, nominee directors and layers of front-men.
These billionaires justify their use of British-controlled secrecy jurisdictions because they say they must protect themselves from corporate predators and political enemies in their home countries.
Another fleeing oligarch, the Georgian Badri Patarkatsishvili, – a partner of fellow exile Boris Berezovsky – was found dead in 2008 in his Surrey mansion.
Patarkatsishvili’s business manager, Eugene Jaffe, managed £500 million of the Georgian’s assets from a central London office in St James’s Square through a BVI company, Salford Capital Partners. In an additional layer of secrecy, Jaffe’s company was owned in turn by an opaque BVI trust he set up called Montana River. …
Other post-Soviet financiers have used Britain’s secret offshore facilities for widely different purposes. The London-based Latvian oil trader Evgeny Tikhonov set up an entity in the BVI to hide a total of $2.4 million (£1.5 million) that his employer, Shell, subsequently convinced a civil British court he was wrongly skimming off from fuel deals. He was, however, acquitted of criminal charges after this.
The fund manager Igor Tsukanov, another arrival in the fashionable west London area of Notting Hill, kept funds in the BVI that will have apparently legally sheltered them from Russian taxes.
And on a lesser scale, Dimitry Sergeev, a mobile phone games entrepreneur from Novosibirsk, faced a potentially costly dispute with a small Manchester supplier over some allegedly unpaid invoices because his firm was BVI-registered firm. A source there said: “We decided it was too difficult to bring a legal action in the BVI.” Sergeev did not comment.
Undoubtedly the most flamboyant post-Soviet beneficiary of Britain’s offshore secrecy regime is Rinat Akhmetov, the richest man in the Ukraine. From a base in the coal-mining Donetsk region, he has personally acquired industrial assets estimated to be worth £11 billion. He shifted £136 million out of the former Soviet republic in 2007, in order to buy the most expensive flat ever sold in London, at One Hyde Park.
Asked why he hid behind a BVI company, his company spokesman in the Ukraine said it was “for internal structuring reasons.” He added: “Water Property Holdings Limited fully paid all taxes and charges . . . as required by applicable laws in the UK. This includes payment in February 2011 of stamp duty land tax (SDLT) at a rate of 4 percent which amounted to £5.467 million.”