Sourced fact
The News
A BBC Panorama investigation revealed that Deloitte, the world's largest accountancy firm, assisted in forging documents to hide Roman Abramovich's wealth and evade taxes. The investigation showed that Deloitte's office in Cyprus signed off on accounts for Abramovich's company, leading to the disappearance of assets worth $672 million, including luxury yachts, palaces, and private apartments. The program accused Deloitte of advising Abramovich on how to avoid paying large taxes by forging documents.
Andrew Mitchell, a lawyer, stated that the evidence provided by Panorama demonstrates that Abramovich was clearly engaged in tax avoidance. However, Abramovich's lawyers denied the allegations, asserting that their client was unaware of or did not direct the document forging and relied on legal and accounting advice.
The investigation notes that Abramovich, once one of the richest and most famous Russian billionaires in Britain, was forced to relinquish Chelsea FC after sanctions were imposed due to his ties with Vladimir Putin. Currently, it is believed that Abramovich resides in Turkey, where sanctions have not been imposed. His assets worth £5.4 billion remain frozen in Jersey, where criminal investigations have been ongoing since 2019.
The investigation confirmed that Abramovich used a network of offshore companies in Cyprus to manage his wealth and evade taxes. In 2006, Abramovich and his associates backdated the transfer of assets to a company called Amiscan to circumvent new legislation requiring corporate transparency. Sheffield University professor Skanks described this action as a breach of legal duty and called it disgraceful.
Furthermore, the investigation uncovered the use of forged documents to avoid taxes on interest profits worth $2 billion. Professor Skanks noted that this action constitutes a breach of legal duty and described it as disgraceful. According to the investigation, Merthrvilles prepared the forged documents at the suggestion of Deloitte to transfer assets to a company in the Bahamas, allowing the assets to be hidden and taxes to be avoided.
Analysis & context
Analysis & Context
Analytically, this investigation highlights the issue of tax avoidance and corruption in the global financial system. It demonstrates how major companies like Deloitte can contribute to money laundering and tax evasion through document forgery. In a broader context, this investigation is part of growing efforts to expose money laundering and tax avoidance practices by the wealthy and millionaires. It also highlights the role of Cyprus as a former prominent financial hub for Russians, where money was laundered and taxes avoided through British Virgin Islands holding companies.
