Deloitte’s Cyprus office helped Abramovich’s companies move billions in assets in an apparent bid to circumvent tax and transparency

An Amiscan tax return certified by Deloitte Cyprus and filed in Cyprus in 2007 covering the years 2003 and 2004 listed the value of the company’s investments as less than 400 Cypriot pounds (less than $700) for each of those years.

Prem Sikka, emeritus professor of accounting at the University of Essex and the University of Sheffield, reviewed the records and said: “Companies are required to publish true and fair accounts. And if the transaction dates are distorted, it is not true. »

Rachel Sexton, independent member of the UK Legal Department’s audit and risk assurance committee and independent non-executive director of Turicum Private Bank, said there are legitimate reasons why a company would backdate documents: “For example, if the transfer of ownership took place in practice, but the documents were never formally signed, the company could produce a document that commemorates the past event. »

But, she added, that doesn’t seem to be the case for Abramovich’s companies.

“The supporting documents should not have been backdated if the structures and arrangements were not in place and the relevant decisions were not made on those dates. This could be considered a fraudulent misrepresentation…The documents should state the date they came into force and be signed on the date they were produced rather than executing them in such a way as to make it appear as if they existed earlier than they were. This could mislead any person examining company records.”

Andreas Ioannou, who still works at Deloitte Cyprus, did not respond to a request for comment.

The Doppleganger Firm

At the same time as the Amiscan conversations were taking place, MeritServus, Millhouse and Deloitte Cyprus were exchanging emails about another Cyprus-registered company that indirectly held billions of dollars in assets for Abramovich.

Electus Investments Limited sat at the top of a vast property tree. Established in Cyprus in May 2001, it served as the “ultimate holding company” for all assets beneficially owned by Abramovich’s Sara Trust, according to a 2002 letter from Deloitte Cyprus to the Central Bank of Cyprus.

This meant that it indirectly owned dozens of companies with assets worth billions of dollars.

Emails exchanged in 2006 show MeritServus, Millhouse and Deloitte Cyprus discussing the fact that Sara’s directors had decided they did not want to produce detailed financial statements for Electus.

But Millhouse’s Khudyk observed that because there was no company above Electus, the companies it owned could not be transferred to a “parent company,” unlike what happened with Amiscan.

Ioannides from MeritServus seemed to have the solution.

He proposed that Millhouse retroactively transfer assets owned by Electus to a BVI company of the same name, which he had set up in late 2003 and which would not be affected by the new transparency requirements in Cyprus.