Russian billionaire Roman Abramovich owes up to 1 billion pounds ($1.2 billion) to the U.K. after attempting to evade taxes on hedge funds investments in a scheme involving Chelsea Football Club, according to a joint investigation by the BBC, The Guardian, and The Bureau of Investigative Journalism published on Jan. 29.
Abramovich had amassed extensive wealth in the U.K. and formerly owned Chelsea, a Premier League football club in London. The billionaire was forced to sell the club and was banned entry to the U.K. in 2022 due to his connections to Russian President Vladimir Putin.
From 1990 until 2020, Abramovich invested about $6 billion in Keygrove Holdings Ltd, a company registered in the British Virgin Islands. Meanwhile, a network of companies owned by Keygrove and registered in the same jurisdiction invested the money in Western hedge funds, the investigation read, citing leaked documents.
Abramovich reportedly made $3.8 billion from the investments. The central figure in the scheme was said to be Eugene Shvidler, a billionaire and Chelsea's former director. Shvidler is currently under sanctions due to his ties to Abramovich.
The directors of the companies registered in the British Virgin Islands allegedly gave Schwiller broad powers to manage them. He then lived in the U.K. and became a British citizen in 2010. If companies are run by a person based in the U.K., profits should be taxed as if they were a U.K. company, the BBC wrote.
Beginning in 2008, Shvidler was authorized to manage Keygrove's investments, which owned companies in the British Virgin Islands, through another company, the investigation read.
According to the leaked documents, significant amounts of tax-free profits from Abramovich's hedge fund investments flowed through a network of companies before ending up at FC Chelsea.
Thus, the hedge fund investments flowed back to British Virgin Islands companies and Keygrove. Keygrove then loaned money to other Abramovich companies, which then lent money to Camberley International Investments Ltd, the company set up to finance Chelsea.
The article came as part of the joint Cyprus Confidential investigation into files leaked in 2023 led by the International Consortium of Investigative Journalists and Paper Trail Media.
Previously, the first part of the investigation by the BBC, the Bureau of Investigative Journalism, and The Guardian revealed that the Cypriot company Blue Ocean Yacht Management, owned by Abramovich, created a fictitious business of renting superyachts used by the entrepreneur himself to evade taxes. From 2005 to 2012, Abramovich did not pay tens of millions of euros in taxes in this way, according to journalists.
Abramovich's net worth is estimated to be around $9 billion, and he has Russian, Israeli, and Portuguese citizenship. He and other top Russian oligarchs were sanctioned after the beginning of the full-scale invasion in February 2022. The oligarch now resides alternatively in Tel Aviv, Istanbul, and Russia's Sochi.
Martin Fornusek
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