ICIJ: Russian oligarch used Cyprus firm to transfer funds day sanctions announced

A Cyprus-based company appears to have been at the heart of a $5 million transfer of Russian wealth, flagged by UK authorities as a suspicious attempt believed to have helped Russian oligarch Petr Aven evade anticipated sanctions, an ICIJ report revealed on Wednesday.

The report is part of a series of articles dubbed Cyprus Confidential, published by the International Consortium of Investigative Journalists (ICIJ) as part of an investigation lasting over eight months, with more than 60 news organisations.

Wednesday’s report names Nicosia professional services firm Abacus, as the executor of a financial transfer allegedly on behalf of Russian oligarch and Putin ally Petr Aven.

Citing court documents filed by the UK’s National Crime Agency (NCA), the ICIJ said the $5 million transfer was carried out on the same day Aven was sanctioned by the EU.

In fact, reports by ICIJ and the Guardian said the transaction was initiated hours before the public announcement over the sanctions.

According to the ICIJ, after Russia’s invasion of Ukraine in February 24 last year, Aven was one of Putin’s allies who joined him at a Kremlin meeting along with other tycoons.

Four days later, Aven was sanctioned by the EU, as were a slew of other Russian oligarchs.

Follow the money

Before the EU announcement was made, Abacus Ltd reportedly initiated the $5 million transaction from an Austrian bank account controlled by the oligarch to an account owned by UK-registered company Ingliston Management Ltd.

The British company was controlled by Aven’s assistant Gater.

The Austrian account at Bank Gutmann for which the payment had come from, was owned by Dendar Investment Fund Ltd. Dendar was administered by Abacus.

The money reached the UK account on March 3, where most of the funds were forwarded to other accounts. The NCA’s court filings described the account activity as “unusual and given that the transactions occurred four days after Mr Aven was sanctioned by the EU, it is suspected that their purpose was to disguise the fact that Mr Aven was the ultimate owner of the funds in order to circumvent anticipated UK sanctions.”

Gater also wired more than $277,000 to two luxury car dealers on March 15, the same day UK sanctions against Aven were imposed, ICIJ reported.

NCA’s court documents marked as “official-sensitive” allege many of the transfers were made for Aven’s benefit and in violation of UK sanctions laws. The civil case is still ongoing.

The court records were obtained by the campaign group Spotlight on Corruption and the ICIJ, after petitioning the judge in the civil trial between Aven and the NCA and were shared with the Guardian as part of the Cyprus Confidential project.

A history with Russian oligarchs

ICIJ’s report built on 3.6 million leaked files said Abacus worked for other Russian oligarchs and firms that were later sanctioned.

This includes Alexey Mordashov’s Severstal and companies connected to VTB Bank and IC Veles Capital.

An ICIJ analysis of the leaked records found that Abacus allegedly provided services to at least 80 companies and trusts owned or controlled by Russians before they came under sanctions in various jurisdictions.

The report said Abacus administered most of these entities in tandem with PwC, which was named in an investigation the previous day for allegedly hurrying to restructure companies belonging to Russian oligarch Alexey Mordashov, as the prospect of sanctions loomed.

Abacus told the outlet it had “abandoned” Mordashov in 2017.

“Abacus does not, anymore and for over a decade, have a close working relationship with PwC,” an Abacus spokesman told the ICIJ, adding that the proportion of Abacus clients also serviced by PwC is about 10 per cent. The firm stressed it did not provide services to any client under sanctions.

Home is where the money is

The ICIJ investigation said Abacus was created in 2001 by former PwC Cyprus executives. It added several directors are PwC alumni, according to their LinkedIn profiles and an archived version of the Abacus website.

Citing Cyprus Confidential documents, Abacus is named as administering Wentworth Trust on Aven’s behalf, which owns a Cyprus-registered property company that in turn owns Aven’s home in Surrey, UK at the Wentworth Estate.

Abacus in 2011 also set up a firm for Aven in Latvia, the report added.

The Nicosia firm controlled Dendar Investment Fund Ltd (which carried out the $5 million transaction) and administered Dendar Asset Holdings Trust.

“Both were central to the corporate infrastructure behind Aven’s vast wealth. Abacus employees were directors of Dendar Investment Fund, as well as for Aven’s other Cyprus-registered interests, such as the entities holding the Surrey estate, according to an ICIJ review of public records and Cyprus Confidential documents.

“According to Cypriot corporate records, Dendar was a shareholder of Alfa Finance Holdings Ltd., which in turn holds shares in the giant Alfa Group, now under sanctions by the US, Europe, Japan, Australia, New Zealand and Canada.”

Alfa Group is named by the ICIJ as the biggest privately owned bank in Russia which Aven helped build.