BBC: A secret deal worth almost 37 million euros connects Abramovich with Putin's "wallets"

Under the secret deal, shares in the hugely profitable Russian advertising agency Video International were transferred - for less money than they were actually worth - from companies ultimately owned by an Abramovich-linked trust to two members of Putin's inner circle

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Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

15.11.2023. 11:51h

Leaked documents reveal a trail of money linking oligarch Roman Abramovich to two people they call President Vladimir Putin's "wallets".

The former owner of the Chelsea football club is under sanctions from Great Britain and the EU, but previously denied any financial connection with the Russian president.

However, leaked documents from Cyprus bring new evidence of Abramovich's involvement in a secret deal worth 40 million dollars, concluded in 2010.

The BBC contacted Abramovich for comment but did not receive a reply by the time the text was published.

They in turn received a million dollars in dividends.

BBC Newsnight, BBC Verify and Panorama teamed up with the Bureau of Investigative Reporting to reveal these findings in the investigation Confidential from Cyprus - global journalistic cooperation, led by reporters International Consortium of Investigative Journalists i Paper trail media.

Classified records reveal that one of the people involved in the secret deal was Sergei Roldugin, a close friend of President Putin.

Cellist Roldugin is the artistic director of the House of Music from St. Petersburg.

He has known Vladimir Putin since they were both young men in St. Petersburg and allegedly introduced him to Lyudmila Shkrebneva, whom the future president married in 1983.

They are now divorced.

Roldugin is the godfather of their first daughter Maria.

The other man is another close associate of the Russian president - Alexander Plekhov, a biochemist turned businessman, also from St. Petersburg.

Roldugin and Plekhov are accused of being "wallets" of Putin, that is, of secretly keeping money and property in his name.

At the beginning of the year, Swiss prosecutors alleged that they were only a "front" and not the real owners of funds in bank accounts opened in connection with the deal involving Video International.

The court did not identify anyone as the actual owner of the account.

President Putin's published salary for 2021 was a little over $100.000.

However, there are rumors that his fortune could be worth it between 125 billion and 200 billion dollars, hidden in a network of fictitious companies and in the accounts of his friends.

Plehov is is under the sanctions of the British government, and Great Britain, the EU and the USA imposed sanctions on Roldugin, describing him as "the custodian of President Putin's offshore wealth".

Cypriot connection

The Cyprus Confidential investigation was based on 3,6 million confidential corporate documents of companies offering offshore services in Cyprus, and focused on his close financial ties to Russia and now-sanctioned oligarchs, many of whom used the island to handle their secret offshore assets.

These include documents from a corporate service provider in Cyprus called MeritServus, originally obtained by the whistleblower group Distributed denial of secrets.

MeritServus found itself under the sanctions of Great Britain earlier this year, after internal documents showed he violated sanctions on behalf of one of his Russian clients.

MeritServus also worked with Abramovich's companies in Cyprus.

The oligarch's fortune totals more than $9 billion and he has made numerous public investments in sports, art and property.

He became one of the most famous and influential Russian oligarchs in Great Britain after he bought the London football club Chelsea in 2003.

He plays down ties to Putin and has in the past disputed suggestions he has close financial ties to him or that he worked on behalf of the Russian leader.

Watch a video about Roman Abramovich:

Abramovich's spokesman said in 2010 that "he has no financial ties of any kind with (then) Prime Minister Putin."

In 2021, a Russian rich man sued journalist Katherine Belton for a passage in her book Putin's people which mentions the claim that he allegedly bought Chelsea in 2003 at Putin's request.

The case was settled by an out-of-court settlement with the publisher agreeing to "more precisely define the position" and add "a more detailed explanation of Abramovich's motivation".

Great Britain and the EU imposed sanctions on Abramovich in March 2022 after the Russian invasion of Ukraine.

"He had privileged access to the president and maintained very good relations with him. This connection with the Russian leader helped him preserve his considerable wealth." they said from the EU.

Abramovich tried to challenge EU sanctions in court earlier this year.

His lawyer argued that the restrictions were motivated by the Russian businessman's "celebrity status" and not "based on any evidence".

But the secret deal with Roldugin and Plekhov suggests close financial ties between Abramovich and Putin.

"This case clearly provides more information and further corroborates the alleged link between Putin and Abramovich so that it becomes increasingly difficult to disprove," said Tom Keating, director of the Center for Financial Crime and Security Studies at the Royal United Services Institute, a defense think tank.

The deal

A complex network of companies in Cyprus and the British Virgin Islands and a trust concealed the football tycoon's involvement in this transaction - until now.

Leaked documents point to a connection between the former Chelsea boss and two companies that bought a combined 25 percent stake in Video International in 2003.

Two companies - Finoto holdings and Grosora holdings - were founded in early 2003.

Both were eventually owned, through a series of fictitious companies, by the Sara trust settlement - whose real owner is Abramovich.

Each company bought a 12,5 percent stake in the Russian advertising giant in September 2003 for the same amount -- about $130.000 each.

The amount paid is "ridiculous", says Vladimir Milov, former Minister of Energy during Putin's first presidential term, and today a prominent opposition leader.

"That stake was clearly worth more, and many times more."

At the time of the purchase, Video International enjoyed a dominant position in the domestic television advertising market, taking a percentage of each broadcast purchased on Russian television channels.

The company was "half a step away from the Kremlin," Milov claims.

Abramovich owned a stake in Video International for the next seven years.

At one point, the company announced a turnover of "more than two billion dollars".

During that period, dividends worth 30 million dollars were paid to Finot and Grosora.

In 2010, Video International reported revenues of three billion dollars.

However, Finoto and Grosora both sold their investments that year for just $20 million, a price that appears to be below its market value.

Finoto Holdings sold the share of Med Media to the network, a company nominally owned by Sergey Roldugin.

On the same day as the sale of Finoto holdings, another company related to Abramovich Grosora holdings, sold its 12,5 percent share to Namiral trading, a company later related to Alexander Plehova.

Watch the video about Abramovich and the financing of Jewish settlers in Jerusalem

Putin's "wallets"

Financial ties between Putin and Roldugin were exposed in 2016 as part of the Panama Papers, which involved the leaking of millions of confidential documents from the Panamanian law firm Mossack Fonseca.

Roldugin, together with Plekhov, found himself at the center of suspicion that he laundered money from the Bank of Russia and some of Putin's closest associates.

Bank Russia has been under US sanctions since 2014, and Washington described it as "the personal bank of senior officials of the Russian Federation".

Roldugin is then told the New York Times that he is not a businessman and that he "doesn't have millions".

At least on paper, however, he appeared to have an offshore fortune of more than $100 million.

"Roldugin clearly serves as a front for Putin's personal real estate," says Vladimir Milov.

"That man is absolutely, obviously, a hundred percent nominal figure because he knows nothing about business, finance, international transactions and the like."

The revelations in the Panama Papers about bank accounts held by Roldugin in Switzerland led to investigations and trials of four Gazprombank employees at the beginning of this year.

Swiss prosecutors accused the bankers of not regularly checking accounts opened in Roldugin's name.

It is also claimed that they failed to identify a friend of the Russian president as politically vulnerable - someone whose position or connections mean they are more at risk of corruption and require more scrutiny under international finance regulations.

According to the indictment, it was established that the orders in Gazprombank were simultaneously opened for Med Media Network and Namiral Trading with the identical "purpose and "structure" to "hold shares and receive dividends" from Video International.

Prosecutors said the arrangement was a direct extension of "the management of funds for the Russian political establishment."

Roldugin and Plehov were "fronts" and not the real owners of the accounts, the prosecutors claimed.

All four bankers were convicted, but they appealed the verdict.

The BBC wrote to Plekhov, Roldugin, the Bank of Russia and Putin seeking comment, but did not receive a response.

'Secret Relationship'

Many wealthy Russians used Cyprus, an EU member state, as part of their offshore investment network.

Through these economic relations, Russia "brings tens of billions of dollars to the Cypriot economy every year," says Fergus Shill of the ICIJ.

Investigation Confidential from Cyprus it raises "difficult questions" for European institutions and EU member states, Schil adds.

"In these documents, we can see that the European member serves as a channel for the secret financial operations of the Kremlin, Vladimir Putin and his camaraderie."

However, there may be signs that Cyprus is trying to straighten itself out.

After the invasion of Ukraine in 2022, many Russians who were considered close financial assets of Putin were placed under EU sanctions.

This had direct consequences for those with Cypriot investments.

"Sanctions have brought awareness that oligarchs must not use Cyprus to do Putin's dirty bidding," says Alexandra Attalides, an independent Cypriot MP.