Deloitte Cyprus helped falsify documents to hide Abramovich’s wealth, investigation finds

Deloitte Cyprus helped falsify documents to hide Roman Abramovich’s wealth and evade tax, according to a joint investigation by BBC Panorama and the Bureau of Investigative Journalism. Accounts signed off by the firm meant assets including superyachts, mansions, and private jets worth $672m (£508m) vanished from Abramovich’s company accounts.

The evidence comes from the Cyprus Confidential leak, comprising more than 500,000 documents first released to the International Consortium of Investigative Journalists. The files cover 1995 to 2022. From 1999 until at least 2013, aides and accountants deployed backdating tactics that experts say may have constituted fraud and tax evasion. Media partners reporting on the files include the Guardian, Paper Trail Media, the Organised Crime and Corruption Reporting Project, and the Cyprus Investigative Reporting Network.

How $672m disappeared from Amiscan’s accounts

In 2006, a new Cyprus transparency law required company accounts to be made public, threatening to expose the secrets of Abramovich’s vast wealth. Abramovich’s associates and MeritServus backdated an asset transfer by three years to make it look like it happened in 2003, moving assets from Amiscan Investments to its BVI parent company. Deloitte Cyprus reviewed the backdated documents and said they were “adequate” to allow removal of assets from Amiscan’s accounts. When the 2003 accounts were signed off by Deloitte in 2006, the homes, planes, and yachts disappeared. Only $75,000 of assets remained. Deloitte signed off even though leaked documents show it knew the accounts were completely misleading.

The Kravin scheme: backdating $2bn out of the tax net

Kravin Investments had almost $2bn in the bank in 2003 and was earning large amounts in interest that should have been taxable in Cyprus. Kravin received a $3bn windfall in May 2003 and retained about $2bn. An August 2005 email from MeritServus to Abramovich’s Russian associates said a plan had been devised after a meeting with Deloitte to change financial statements and accounting records for 2003 and 2004. MeritServus created backdated documents falsely showing Kravin was only holding and investing funds on behalf of its BVI parent company, Kelvedon Worldwide. Documents detailing the supposed trust arrangement were given dates between March and December 2003 despite being created at least two years later. A September 2005 email from Deloitte’s Antonis Taliotis stated that “certain changes will have to be made to the accounts.” An associate in Russia emailed “I agree.”

An earlier pattern: the 2000 Sibneft extraction

In 2000, Eugene Tenenbaum and Demetris Ioannides, then still at Deloitte Cyprus, met in London to discuss extracting almost $100m from Cypriot companies holding stakes in Sibneft. Ioannides said it was essential that any transaction couldn’t reveal the Cyprus companies and that the money had to appear “earned.” Deloitte Cyprus’s solution involved backdated consultancy agreements showing Abramovich’s Sibneft-owning companies paid an intermediary business $98m for consultancy services. The intermediary supposedly passed 99.9% of the money to Abramovich as “commission.” Ioannides found a Cypriot off-the-shelf company called PB Mediapower Enterprises for the arrangement. With Tenenbaum’s authorisation, directors of Deloitte Cyprus signed the backdated documents. Tenenbaum appears to have been involved in the backdating and may also have given false evidence to the UK High Court. He denied any wrongdoing. He said he relied on specialist advice from Deloitte Cyprus.

Deloitte, MeritServus and the Cyprus connection

Until 2005, Deloitte owned MeritServus; after they split, the two companies worked closely together with Abramovich’s associates to manage his global fortune. Demetris Ioannides was chair of Deloitte Cyprus before spinning out MeritServus, which served Abramovich for nearly 20 years. Ioannides’s August 2005 email cited discussions with Deloitte Cyprus partners Antonis Taliotis and Nicos Charalambous. MeritServus and Ioannides were sanctioned by the UK in 2023 for their role helping Russian oligarchs hide their wealth. Abramovich’s investment vehicle was called Millhouse. Profits from Abramovich’s oil deals in Russia were funnelled into a web of offshore companies administered from Cyprus by MeritServus, based in Limassol.

Responses and expert assessment

Abramovich’s lawyers deny that he evaded tax or concealed his fortune. “Any suggestion that our client evaded tax, or sought to deceive the Cypriot authorities, is denied, and publication of the same would be defamatory of him,” they said. “If an arrangement was proposed by professional advisers of Deloitte’s standing, it would have been entirely proper for companies linked to our client (in which he was not involved on a day-to-day basis) to rely on it.” Deloitte Cyprus said it acts in compliance with applicable laws and could no longer access the relevant material because of the time that had elapsed. Barrister Andrew Mitchell KC described the scheme as “straightforward” tax evasion and a “blatant move to protect from legitimate taxation assets which should otherwise have been subject to tax.” Lord Sikka, professor of accounting at the University of Sheffield, said it was a “violation of a statutory duty” and “pretty scandalous” to misrepresent transaction dates.

From Sibneft to sanctions

Abramovich made his fortune from a deal to buy Russian state-owned oil company Sibneft in the 1990s, obtaining it for roughly $250m and reportedly spending as little as $19m of his own money. By the time he sold the last of his Sibneft shares to Gazprom in 2005, he had raised $16bn. Abramovich has previously said allegations of corruption in the oil deal are false. He bought Chelsea Football Club in 2003 and bankrolled its most successful period. After Russia’s full-scale invasion of Ukraine in 2022, Abramovich was sanctioned by the UK as an associate of Vladimir Putin and forced to sell Chelsea. In Jersey, £5.4bn of Abramovich’s assets remain frozen and a criminal investigation has been going on for four years. Abramovich’s lawyers deny the allegations in the Jersey investigation and say it was undertaken for political purposes. Abramovich has been reported to be living in Turkey, which did not apply sanctions.

The Panorama programme “Roman Abramovich: How He Hid His Fortune” was broadcast on BBC One at 20:00 BST on Monday 12 October and is available on BBC iPlayer.