Revealed: the $2bn offshore trail that leads to Vladimir Putin

[Rob L 3,811]

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A massive leak of documents shines new light on the fabulous fortunes of the Russian president’s inner circle

• Putin’s best friend: the cellist who holds the key to his fortune
• Iceland’s PM faces snap election over revelations
• What are the Panama Papers?

A network of secret offshore deals and vast loans worth $2bn has laid a trail to Russia’s president, Vladimir Putin.

An unprecedented leak of documents shows how this money has made members of Putin’s close circle fabulously wealthy.

Though the president’s name does not appear in any of the records, the data reveals a pattern – his friends have earned millions from deals that seemingly could not have been secured without his patronage.

The documents suggest Putin’s family has benefited from this money – his friends’ fortunes appear his to spend.

The files are part of an unprecedented leak of millions of papers from the database of Mossack Fonseca, the world’s fourth biggest offshore law firm. They show how the rich and powerful are able to exploit secret offshore tax regimes in myriad ways.

The offshore trail starts in Panama, darts through Russia, Switzerland and Cyprus – and includes a private ski resort where Putin’s younger daughter, Katerina, got married in 2013.

The Panama Papers shine a particular spotlight on Sergei Roldugin, who is Putin’s best friend. Roldugin introduced Putin to the woman he subsequently married, Lyudmila, and is godfather to Putin’s older daughter, Maria.

A professional musician, he has apparently accumulated a fortune – having been placed in ostensible control of a series of assets worth at least $100m, possibly more.

Roldugin appears to have been picked for this role because of his lesser profile. He has denied in documents to bank officials in Switzerland and Luxembourg that he is close to any Russian public figures. He has also said he is not a businessman.

Yet the files reveal Putin’s longstanding intimate has a 12.5% stake in Russia’s biggest TV advertising agency, Video International, which has annual revenues of more than £800m. Previously, its ownership was a closely guarded secret.

Roldugin was also secretly given an option to buy a minority stake in the Russian truck manufacturer Kamaz, which makes army vehicles, and has 15% of a Cyprus-registered company called Raytar.

He also owns 3.2% of Bank Rossiya. The St Petersburg private bank has been described as Putin’s “crony bank”. The US imposed sanctions on it after Russia’s 2014 invasion of Ukraine.

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Sergei Roldugin.

These assets are only part of a series of linked financial schemes revealed in the documents that revolve round Bank Rossiya.

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The bank is headed by Yuri Kovalchuk. The US alleges he is the “personal banker” for many senior Russian government officials including Putin. The Panama Papers disclose that Kovalchuk and Bank Rossiya achieved the transfer of at least $1bn to a specially created offshore entity called Sandalwood Continental.

These funds came from a series of enormous unsecured loans from the state-controlled Russian Commercial Bank (RCB) located in Cyprus and other state banks. There is no explanation in the files of why the banks agreed to extend such unorthodox credit lines.

Some of the cash obtained from RCB was also lent back onshore in Russia at extremely high interest rates, with the resulting profits siphoned off to secret Swiss accounts.

A $6m yacht was purchased by Sandalwood and shipped to a port near St Petersburg.

Cash was also handed over directly to the Putin circle, this time in the form of very cheap loans, made with no security and with interest rates as low as 1%. It is not clear whether any loans have been repaid.

In 2010 and 2011, Sandalwood made three loans worth $11.3m to an offshore company called Ozon, which owns the upmarket Igora ski resort in the Leningrad region. Ozon belongs to Kovalchuk and a Cypriot company. Putin is the resort’s star patron and a reputed resident.

Eighteen months after the loans, the president used Igora as the venue for the wedding of Katerina. Her groom was Kirill Shamalov, the son of another of Putin’s old St Petersburg friends. News of the ceremony, from which cameras were banished, only emerged in 2015.

The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the Guardian and the BBC.

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Sergei Roldugin, Vladimir Putin and Dmitry Medvedev, then Russian president, tour the House of Music in St Petersburg in 2009. Photograph: Dmitry Astakhov/Eyevine

They reveal a number of other manoeuvres by the Putin circle to move cash offshore. There is nothing inherently illegal in using offshore companies.

The transactions, however, include apparently fake share deals, with shares “traded” retrospectively; multimillion-dollar charges for vague “consultancy” services; and repeated payments of large sums in “compensation” for allegedly cancelled share deals. In 2011 a Roldugin company buys the rights to a $200m loan for $1. “This is not business, this is creating the appearance of business in order to continually move and hide assets,” Andrew Mitchell QC, a leading authority on money-laundering, told BBC Panorama.

Such layers of secrecy surrounded the offshore deals that Bank Rossiya staff in St Petersburg sent all their instructions to a confidential intermediary – a firm of Swiss lawyers in Zurich.

The Swiss lawyers in turn arranged for Mossack Fonseca to set up shell companies, typically registering them in the secretive British Virgin Islands, with sham nominee directors from Panama to sign approvals for the deals. Even Mossack’s confidential records of true owners have frequently turned out to be further fronts.

Speculation over the size of Putin’s personal fortune has gone on for almost a decade, following reports in 2007 that he was worth at least $40bn, based on leaks from inside his own presidential administration.

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In 2010, US diplomatic cablessuggested Putin held his wealth via proxies. The president formally owned nothing, they added, but was able to draw on the wealth of his friends, who now control practically all of Russia’s oil and gas production and industrial resources.

Guys, to be honest I am not ready to give comments now

Sergei Roldugin

In 2014, after Russia seized Crimea, the White House imposed sanctions on leading members of Putin’s circle, including Kovalchuk, citing their close ties to “a senior official of the Russian Federation” – a euphemism for Putin himself. The Panama Papers reveal that the Putin group appeared to have become nervous for unclear reasons after October 2012. Sandalwood was closed down and its operations switched to another offshore entity registered in the BVI, called Ove Financial Corp.

One of the companies linked to Ove Financial Corp belonged to Mikhail Lesin, Putin’s media tsar and former press minister. Lesin founded the Kremlin’s propaganda TV channel Russia Today but later fell out of favour. He was mysteriously found dead last November in a Washington hotel room with blunt force injuries to the head.

Asked about the offshore companies linked to him last week, Rodulgin said: “Guys, to be honest I am not ready to give comments now … These are delicate issues. I was connected to this business a long time ago. Before ‘perestroika’. It happened … And then it started growing and such things happened. The House of Music [in St Petersburg] is subsidised from this money.”

Roldugin declined to answer further written questions.

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Roldugin presents a diploma to Sir Paul McCartney, in front of St Petersburg’s then governor, Valentina Matviyenko, in 2003. Photograph: PhotoXPress

The Putin circle’s use of offshore companies contrasts with the president’s call for “deoffshoreisation”, urging Russians to bring cash hidden abroad home. Others who make use of offshore companies include oil trader Gennady Timchenko, Putin’s friend of 30 years. The US imposed sanctions on him in 2014. Others in the data are Arkady and Boris Rotenberg, Putin’s childhood friends and former judo partners. They are now billionaire construction tycoons. The Arsenal FC shareholder Alisher Usmanov also appears. He has at least six companies registered in the Isle of Man. There is no suggestion this is illegal.

Dmitry Peskov, Putin’s official spokesman, declined to comment on specific allegations against the president. Speaking last week, Peskov said western spy agencies were behind an all-out “information attack” against him to destabilise Russia before elections. Peskov dismissed the investigation by the Guardian and others as an “undisguised, paid-for hack job”. He said Russia had “legal means” to defend Putin’s dignity and honour.

RCB Cyprus said it could not disclose information about its clients. It said that in October 2013 it had “refined its strategy”. It had opened a branch in Luxembourg, received a new investor, and was now under direct European Central Bank supervision. Given this, it was “utterly unfounded” to suggest the bank was a “pocket” for top Russian officials. The bank said it had voluntarily submitted the allegations to Cyprus’s money-laundering authority. The auditor PwC Cyprus said it had audited RCB’s accounts but that it did not provide services to Sandalwood.

Lawyers for Kovalchuk said information about Bank Rossiya was publicly available. “We do not understand why you address these questions to Mr Kovalchuk.”

US political scientist Karen Dawisha said it was inconceivable that Putin’s friends had become rich without his patronage. “He takes what he wants. When you are president of Russia, you don’t need a written contract. You are the law.”

Panama Papers reporting team: Juliette Garside, Luke Harding, Holly Watt, David Pegg, Helena Bengtsson, Simon Bowers, Owen Gibson and Nick Hopkins

Edited April 4, 2016 by Rob L

[ready4ONE 5,400]

The hero of the Right.

[Jacque67 7,328]

Interesting article. Thanks for the share, Rob.

[ExPatty 502]

The hero of the Right.

Facts matter.

http://www.pewresearch.org/fact-tank/2015/06/15/republicans-and-democrats-sharply-divided-on-how-tough-to-be-with-russia/

[ready4ONE 5,400]

Facts matter.

http://www.pewresearch.org/fact-tank/2015/06/15/republicans-and-democrats-sharply-divided-on-how-tough-to-be-with-russia/

What facts beyond the frequent droning on about what a great and tough leader who is much to be admired right here in VJ? I'm sure you think you got me again, but I was referring to the VJ faboys.

[ExPatty 502]

What facts beyond the frequent droning on about what a great and tough leader who is much to be admired right here in VJ? I'm sure you think you got me again, but I was referring to the VJ faboys.

You said the "right". If you want to edit that statement to certain VJ fanboys, it may be accurate. I am not out to "get you".

[ready4ONE 5,400]

You said the "right". If you want to edit that statement to certain VJ fanboys, it may be accurate. I am not out to "get you".

The VJ fan boys I am referring to are universally and consistently from the Right. No correction necessary. Thanks for playing!

[ExPatty 502]

The VJ fan boys I am referring to are universally and consistently from the Right. No correction necessary. Thanks for playing!

wow you respond to correction very badly! Somebody literally ran a poll that ought to disabuse you of your statement and you still cling to your misconception.

[ready4ONE 5,400]

wow you respond to correction very badly! Somebody literally ran a poll that ought to disabuse you of your statement and you still cling to your misconception.

You correct incorrectly. I think it's on you to understand my clarification which only you needed. You are referring to something else entirely.

Go back and read the #######-lobbing posts here on VJ about the great Putin.

[ExPatty 502]

You correct incorrectly. I think it's on you to understand my clarification which only you needed. You are referring to something else entirely.

Go back and read the #######-lobbing posts here on VJ about the great Putin.

I guess the word "clarification" is the best we can do. Thanks!

[da doufu 5]

The VJ fan boys I am referring to are universally and consistently from the Right. No correction necessary. Thanks for playing!

You seem angry. Do you need help ?

[Rob L 3,811]

You seem angry. Do you need help ?

Yes...we need a Hero

[ExPatty 502]

Massive protests in iceland over their PM's name being in these.

http://www.dailymail.co.uk/news/article-3523349/Thousands-gather-Reykjavik-call-Icelandic-Prime-Minister-s-resignation-Panama-Papers-scandal-biggest-mass-protest-2008-financial-crisis.html

Icelanders also told the banks to pound sand during the crisis. They have heart.

[ready4ONE 5,400]

You seem angry. Do you need help ?

Angry? No. I'm just a little bit tired of the proud ignorance so often on display in CEHST. You are currently the last in a dwindling but vocal line of posters in that category.

[Rob L 3,811]

Panama Papers scandal: who are the biggest names?

By Nick Miller

April 5, 2016, 6:27 a.m.

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Here are some of the biggest names caught up in the Panama Papers scandal.

Petro Poroshenko – President, Ukraine

Ukraine's billionaire "chocolate king" became president in 2014, painting himself as an opponent of the corrupt oligarchy. Last year he promised to "prevent the inappropriate influence of private interests on the state".

According to the ICIJ, as Russian troops rolled into Eastern Ukraine in August 2014 Poroshenko became the sole shareholder of Prime Asset Partners Ltd, set up in the British Virgin Islands.

A spokesman for Poroshenko said that though Prime Asset Partners hadn't been mentioned in his financial disclosures, they had been set up in order to help sell the Roshen confectionary group, and Poroshenko's assets would be transferred to a blind trust "once legal formalities are completed".

Lionel Messi - Soccer player

The Barcelona star was among those named in reports. Spanish tax authorities say they are investigating allegations of tax irregularities involving the soccer player.

Messi's family threatened to sue media outlets that released the information linking the Argentine player to accounts in Panama.

Last year, Spanish authorities charged Messi and his father with three counts of tax fraud for allegedly defrauding Spain's tax office of 4.1 million euros ($A6.10 million) in unpaid taxes from 2007-09.

They will stand trial in late May and face nearly two years in prison if found guilty.

Jackie Chan - actor

Hong Kong-born action star Jackie Chan has been reported as being linked to the Panama Papers. USA Today reported that Chan "has at least six companies managed through the law firm," [of law firm in Panama called Mossack Fonesca] according to the consortium's website.

The Hong Kong-born Chan's representatives in the US did not immediately return a call for comment from MCT.

Salman bin Abdulaziz bin Abdulrahman Al Saud – King of Saudi Arabia

King Salman took the throne after his brother died in January 2015. According to the Mossack Fonseca data, he also has an "unspecified role" in a network of British Virgin Islands companies.

These companies were used to buy multimillion-dollar luxury homes in central London, and King Salman is also the "principal user" of a motor yacht, Erga, registered by a BVI company that can be traced back to the king.

Li Xiaolin – daughter of former Chinese premier Li Peng

Li, as vice-president of China Power Investment Corporation, was dubbed China's "Power Queen".

The ICIJ reports that she and her husband were the beneficial owners of a Lichtenstein foundation which in turn owned a BVI company, which held the profits from heavy machinery exports from Europe to China.

Sergey Roldugin – close friend of Vladimir Putin

Rodulgin, a world-class cellist and artistic director of the St Petersburg House of Music, was "almost like brothers" with Putin in the late 1970s. He is godfather to Putin's oldest daughter.

According to the ICIJ, he owns three offshore companies. One of them "gained major influence" over Russia's biggest truck-maker, and another controls a big share in Russia's largest television advertising buyer.

Arkady and Boris Rotenberg – friends of Vladimir Putin

The billionaire brothers were childhood friends of Russian President Putin, bonding over martial arts, the ICIJ reports. They have amassed a multibillion-dollar fortune through contracts with state and state-owned companies, and are named in US sanctions.

According to the ICIJ data they own at least seven companies registered in the BVI, involved in a range of projects including pipeline construction and the construction of an Italian villa.

Ian Cameron – British Prime Minister David Cameron's father

Ian Cameron died in 2010, having made a fortune as a stockbroker and investor. According to the ICIJ, his Blairmore Holdings fund in Panama held millions and was "not liable to taxation on its income or capital gains".

Juan Pedro Damiani – FIFA ethics committee member

One of Uruguay's richest men and president of the country's most popular football teams, attorney Damiani is one of Mossack Fonseca's biggest clients – and Damiani himself managed companies through which FIFA members may have received bribes,Suddeutsche Zeitung reports.

His law firm's offshore clients include three defendants in the FIFA scandal. The BBC reports Damiani and his firm provided legal assistance for at least seven offshore companies linked to football official Eugenio Figueredo, who was arrested last May and charged with fraud and money laundering.

Sigmundur David Gunnlaugsson – Prime Minister, Iceland

Iceland's hugely popular Pirate Party have been pushing for a vote of no confidence in Gunnlaugsson since the tax haven scandal broke here.

The Panama papers reveal he and his wife stashed their money in an undeclared tax haven while the country nearly sank under the impact of the financial crisis.

A British Virgin Islands company owned by his wife is now claiming millions from the bankruptcy estate of Iceland's crashed banks.

Gunnlaugsson, who became PM in 2013, is closely involved in negotiations with claimants for the bank's assets, MBL.is reported – which could affect the value of the bonds his wife's company owns.

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The story Panama Papers scandal: who are the biggest names? first appeared on The Sydney Morning Herald.

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Here are some of the biggest names caught up in the Panama Papers scandal.

Petro Poroshenko – President, Ukraine

Ukraine's billionaire "chocolate king" became president in 2014, painting himself as an opponent of the corrupt oligarchy. Last year he promised to "prevent the inappropriate influence of private interests on the state".

According to the ICIJ, as Russian troops rolled into Eastern Ukraine in August 2014 Poroshenko became the sole shareholder of Prime Asset Partners Ltd, set up in the British Virgin Islands.

A spokesman for Poroshenko said that though Prime Asset Partners hadn't been mentioned in his financial disclosures, they had been set up in order to help sell the Roshen confectionary group, and Poroshenko's assets would be transferred to a blind trust "once legal formalities are completed".

Lionel Messi - Soccer player

The Barcelona star was among those named in reports. Spanish tax authorities say they are investigating allegations of tax irregularities involving the soccer player.

Messi's family threatened to sue media outlets that released the information linking the Argentine player to accounts in Panama.

Last year, Spanish authorities charged Messi and his father with three counts of tax fraud for allegedly defrauding Spain's tax office of 4.1 million euros ($A6.10 million) in unpaid taxes from 2007-09.

They will stand trial in late May and face nearly two years in prison if found guilty.

Jackie Chan - actor

Hong Kong-born action star Jackie Chan has been reported as being linked to the Panama Papers. USA Today reported that Chan "has at least six companies managed through the law firm," [of law firm in Panama called Mossack Fonesca] according to the consortium's website.

The Hong Kong-born Chan's representatives in the US did not immediately return a call for comment from MCT.

Salman bin Abdulaziz bin Abdulrahman Al Saud – King of Saudi Arabia

King Salman took the throne after his brother died in January 2015. According to the Mossack Fonseca data, he also has an "unspecified role" in a network of British Virgin Islands companies.

These companies were used to buy multimillion-dollar luxury homes in central London, and King Salman is also the "principal user" of a motor yacht, Erga, registered by a BVI company that can be traced back to the king.

Li Xiaolin – daughter of former Chinese premier Li Peng

Li, as vice-president of China Power Investment Corporation, was dubbed China's "Power Queen".

The ICIJ reports that she and her husband were the beneficial owners of a Lichtenstein foundation which in turn owned a BVI company, which held the profits from heavy machinery exports from Europe to China.

Sergey Roldugin – close friend of Vladimir Putin

Rodulgin, a world-class cellist and artistic director of the St Petersburg House of Music, was "almost like brothers" with Putin in the late 1970s. He is godfather to Putin's oldest daughter.

According to the ICIJ, he owns three offshore companies. One of them "gained major influence" over Russia's biggest truck-maker, and another controls a big share in Russia's largest television advertising buyer.

Arkady and Boris Rotenberg – friends of Vladimir Putin

The billionaire brothers were childhood friends of Russian President Putin, bonding over martial arts, the ICIJ reports. They have amassed a multibillion-dollar fortune through contracts with state and state-owned companies, and are named in US sanctions.

According to the ICIJ data they own at least seven companies registered in the BVI, involved in a range of projects including pipeline construction and the construction of an Italian villa.

Ian Cameron – British Prime Minister David Cameron's father

Ian Cameron died in 2010, having made a fortune as a stockbroker and investor. According to the ICIJ, his Blairmore Holdings fund in Panama held millions and was "not liable to taxation on its income or capital gains".

Juan Pedro Damiani – FIFA ethics committee member

One of Uruguay's richest men and president of the country's most popular football teams, attorney Damiani is one of Mossack Fonseca's biggest clients – and Damiani himself managed companies through which FIFA members may have received bribes,Suddeutsche Zeitung reports.

His law firm's offshore clients include three defendants in the FIFA scandal. The BBC reports Damiani and his firm provided legal assistance for at least seven offshore companies linked to football official Eugenio Figueredo, who was arrested last May and charged with fraud and money laundering.

Sigmundur David Gunnlaugsson – Prime Minister, Iceland

Iceland's hugely popular Pirate Party have been pushing for a vote of no confidence in Gunnlaugsson since the tax haven scandal broke here.

The Panama papers reveal he and his wife stashed their money in an undeclared tax haven while the country nearly sank under the impact of the financial crisis.

A British Virgin Islands company owned by his wife is now claiming millions from the bankruptcy estate of Iceland's crashed banks.

Gunnlaugsson, who became PM in 2013, is closely involved in negotiations with claimants for the bank's assets, MBL.is reported – which could affect the value of the bonds his wife's company owns.

Jackie Chan when reached for comment was all...........