The Isle of Man featured at the start of Roman Abramovich’s offshore structure before being cut out of it, and was later avoided by his advisers for an arrangement involving backdated paperwork, according to an investigation published on Monday by the Bureau of Investigative Journalism.

The Bureau alleges that Deloitte’s Cyprus branch, and Meritservus, the firm later spun out of it, falsified more than 1,000 corporate records for Abramovich by giving them dates earlier than when they were created, in some cases by as much as five years. It says the documents helped conceal at least $10bn in assets and avoid tens of millions of dollars in tax, and that the backdating it was able to identify took place between 1999 and 2013. A financial crime barrister who reviewed the findings for the Bureau said one of the arrangements amounted to tax evasion. Abramovich and his associates deny wrongdoing, and Deloitte Cyprus said it could not comment on specifics.

The Bureau’s reporting was produced with BBC Panorama, The Guardian and the Organized Crime and Corruption Reporting Project, and is based on leaked documents obtained through the Cyprus Confidential project organised by the International Consortium of Investigative Journalists and Paper Trail Media.

Where the Island comes in

The Bureau reports that Deloitte’s work for Abramovich began in 1999, when its offices in Cyprus and the Isle of Man worked together to route ownership of Sibneft, the Russian oil company at the root of his fortune, through both islands to a trust in Liechtenstein. According to the Bureau, the Cyprus branch soon took over the project, dropping the Isle of Man companies and rerouting ownership through the British Virgin Islands to a Cypriot trust.

The Bureau says it found no evidence of involvement by any Deloitte entity other than its Cyprus branch, and makes no allegation against the Isle of Man office. Deloitte operates as a network of independent firms, each liable only for its own work, and its Isle of Man office now operates as part of Deloitte UK. Asked by Community.IM about the Isle of Man office’s role in the 1999 structure, Deloitte UK said it would not be commenting.

Steering clear of the Island

The second Isle of Man reference in the Bureau’s report concerns a later arrangement. It reports that in 2000, Abramovich wanted to extract almost $100m from his Sibneft companies in a way that would appear to have been earned. According to the Bureau, Demetris Ioannides, then chairman of Deloitte Cyprus, proposed backdated consultancy agreements under which $98m would be paid to an intermediary company, which would pass 99.9% of it to Abramovich as commission.

The Bureau says that because the share deals the consultancy supposedly advised on had taken place about a year earlier, the arrangement needed a company that already existed at the time. It reports that Ioannides found a suitable shell company in Cyprus, having advised against jurisdictions such as the Isle of Man, where questions might arise over the need for an old company.

Abramovich’s lawyers told the Bureau he denied taking part in any scheme to enrich himself through sham agreements and backdated documents.

The Bureau does not say what lay behind Ioannides’ reported view of the Island, or exactly when in 2000 he expressed it. In a statement to Community.IM, the Isle of Man Financial Services Authority said licensing of corporate service providers under the Corporate Service Providers Act 2000 was brought into force in stages between November 2000 and January 2002. Under that regime, it said, a person could not, by way of business, form, sell or transfer an existing company to someone else unless they were licensed or exempt. Trust services were brought into regulation in 2005, and both regimes were replaced by the Financial Services Act 2008, the Authority said.

Earlier reporting

Other reporting has also linked the Island to Abramovich-connected assets. According to OCCRP’s Russian Asset Tracker, three helicopters on the Manx aircraft register, including M-HELI, were owned by Flambards Limited, an Isle of Man company whose British Virgin Islands parent Abramovich declared as one of his assets in 2011. OCCRP also reported that two more helicopters, said to have been built for his superyacht Solaris, were owned by a Jersey company directed by Eugene Tenenbaum and were removed from the Manx register the day after the UK sanctioned Abramovich. The Bureau names Tenenbaum as one of four close Abramovich advisers involved in the alleged backdating, which he denies.

In March 2022, the Isle of Man Government claimed that M-HELI had been deregistered, following reports that the UK had asked the Island to act, and reaffirmed its commitment to implementing UK and UN sanctions against Russia.

The Bureau also reports that Jersey has been investigating since 2022 whether billions of pounds of frozen Abramovich-linked assets are the proceeds of crime, and that Abramovich challenged that investigation at the European Court of Human Rights in April, calling it unfair and abusive. It says roughly £2.5bn from his 2022 sale of Chelsea remains frozen in a UK bank account.

Responses

Deloitte Cyprus told the Bureau it could not comment on specifics because it no longer had access to correspondence from more than 20 years ago, and said it complies with applicable laws.
Abramovich, through his lawyers, denied any knowledge of or involvement in unlawful backdating, concealing assets or evading tax, and said companies linked to him had relied on professional advisers including Deloitte.

Tenenbaum, through his lawyers, denied participating in, authorising or knowing of any improper backdating, and said he relied on specialist advice from Deloitte and Cypriot corporate advisers. His lawyers also said a backdated document is not necessarily improper, for example where it records a deal already agreed but not yet formally documented. Lawyers for Ioannides, now 83, said he was currently unable to read or respond to questions.

The Isle of Man Financial Services Authority said it was aware of “recent open source international media coverage regarding Roman Abramovich and the Cyprus office of Deloitte”. It said it does not comment on regulatory matters relating to specific firms or individuals, but is “committed to working with industry and partner agencies to maintain the Island’s reputation as a well-regulated international finance centre”. The Authority did not say whether it would review the Isle of Man aspects of the Bureau’s findings. It said lead responsibility for sanctions on the Island rests with the Treasury’s Customs and Immigration Division.