World Bulletin / News Desk
A network of secret offshore deals and loans worth as much as $2bn has laid a trail to Russia’s president, Vladimir Putin.
An unprecedented leak of documents shows how this money has made members of Putin’s close circle unbelievably wealthy - the source of the documents being the database of Mossack Fonseca, the worlds fourth biggest offshore law firm - with the data revealing a pattern that there was no possibility of Putin's close friends, and family, being able to secure that wealth without his patronage.
The offshore trail starts in Panama - and details how the rick and powerful are able to exploit offstore tax regimes making its way through Russia, Switzerland and Cyprus. It also includes a private ski resort where Putin’s younger daughter, Katerina, got married in 2013.
The main character though is Sergei Roldugin, who is Putin’s best friend. A professional musician, Roldugin introduced Putin to the woman he subsequently married, Lyudmila, and is godfather to Putin’s older daughter, Maria. Roldugin, has also been placed in control of assets worth at least $100m, possibly more, due to his lesser profile. In bank documents he has denied any involvement in that he is close to any Russian public figures. He has also said he is not a businessman.
Despite saying that he is not an intimate, the Guardian has revealed that he has a 12.5% stake in Russia’s biggest TV advertising agency, Video International, which has annual revenues of more than £800m; he was given an option to buy a minority stake in the Russian truck manufacturer Kamaz, which makes army vehicles, and has 15% of a Cyprus-registered company called Raytar.
The cellist also owns 3.2% of Bank Rossiya. The St Petersburg private bank has been described as Putin’s “crony bank”. The US imposed sanctions on it after Russia’s 2014 invasion of Ukraine.
The bank is headed by Yuri Kovalchuk. The US alleges he is the “personal banker” for many senior Russian government officials including Putin. The Panama Papers disclose that Kovalchuk and Bank Rossiya achieved the transfer of at least $1bn to a specially created offshore entity called Sandalwood Continental.
These funds came from a series of enormous unsecured loans from the state-controlled Russian Commercial Bank (RCB) located in Cyprus and other state banks. There is no explanation in the files of why the banks agreed to extend such unorthodox credit lines.
Some of the cash obtained from RCB was also lent back onshore in Russia at extremely high interest rates, with the resulting profits siphoned off to secret Swiss accounts.
A $6m yacht was purchased by Sandalwood and shipped to a port near St Petersburg.
Cash was also handed over directly to the Putin circle, this time in the form of very cheap loans, made with no security and with interest rates as low as 1%. It is not clear whether any loans have been repaid.
In 2010 and 2011, Sandalwood made three loans worth $11.3m to an offshore company called Ozon, which owns the upmarket Igora ski resort in the Leningrad region. Ozon belongs to Kovalchuk and a Cypriot company. Putin is the resort’s star patron and a reputed resident.
Eighteen months after the loans, the president used Igora as the venue for the wedding of Katerina. Her groom was Kirill Shamalov, the son of another of Putin’s old St Petersburg friends. News of the ceremony, from which cameras were banished, only emerged in 2015.
The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the Guardian and the BBC.
They reveal a number of other manoeuvres by the Putin circle to move cash offshore. There is nothing inherently illegal in using offshore companies.
The transactions, however, include apparently fake share deals, with shares “traded” retrospectively; multimillion-dollar charges for vague “consultancy” services; and repeated payments of large sums in “compensation” for allegedly cancelled share deals. In 2011 a Roldugin company buys the rights to a $200m loan for $1. “This is not business, this is creating the appearance of business in order to continually move and hide assets,” Andrew Mitchell QC, a leading authority on money-laundering, told BBC Panorama.
Speculation over the size of Putin’s personal fortune has gone on for almost a decade, following reports in 2007 that he was worth at least $40bn, based on leaks from inside his own presidential administration.
In 2014, after Russia seized Crimea, the White House imposed sanctions on leading members of Putin’s circle, including Kovalchuk, citing their close ties to “a senior official of the Russian Federation” – a euphemism for Putin himself. The Panama Papers reveal that the Putin group appeared to have become nervous for unclear reasons after October 2012.
One of the companies linked to Ove Financial Corp belonged to Mikhail Lesin, Putin’s media tsar and former press minister. Lesin founded the Kremlin’s propaganda TV channel Russia Today but later fell out of favour. He was mysteriously found dead last November in a Washington hotel room with blunt force injuries to the head.
Source: The GuardianLast Mod: 04 Nisan 2016, 12:22