Russian billionaire Roman Abramovich faces Cyprus police probe over his offshore fortune

Cyprus police have opened an investigation into how Russian-Israeli billionaire Roman Abramovich's assets were managed through Cypriot companies, nine days after leaked records accused his advisers of backdating paperwork to move billions of dollars out of the companies' books.

Police spokesman Andreas Anastasiades told the Cypriot parliament's institutions committee on Wednesday that the inquiry would be carried out together with other competent authorities and was expected to take about six months. Police said the age of the case, which dates back to the 2000s, did not remove the legal basis for an investigation.

A justice ministry spokesperson told the same session that the information was being evaluated and that a criminal investigation would follow if there were indications that offences had been committed.

Abramovich, 59, made his fortune in Russian oil in the 1990s and owned Chelsea Football Club for 19 years. He has said he took independent professional tax and legal advice and acted on it. His lawyers deny that he had any role in tax evasion and say there is no evidence he knew about, authorized or directed the falsification of any document.

What the leaked files allege

The probe follows an investigation published on Oct. 12 that drew on thousands of leaked emails and corporate records from MeritServus, a corporate services firm in the coastal city of Limassol that ran Abramovich's offshore companies from 1995 to 2022. MeritServus was part of Deloitte's Cyprus business until 2005.

The investigation alleged that in 2006, when a new Cypriot law required company accounts to be made public, advisers drew up documents that dated asset transfers back to 2003. One company, Amiscan Investments, had listed about €578 million ($649 million) of yachts, private jets and property in France and Britain in its draft 2003 accounts. When Deloitte Cyprus signed off the accounts in December 2006, about €65,000 remained.

A second company, Electus Investments, was linked to assets worth more than €8.6 billion ($9.7 billion), including his investment firm Millhouse. A third, Kravin Investments, received about €2.6 billion ($2.9 billion) in 2003 from the sale of shares in Russian oil company Sibneft to Yukos. Emails in the leak show a 2005 plan to make it appear the money had moved to a British Virgin Islands company two years earlier, which would have reduced the tax owed in Cyprus on interest it earned.

Deloitte Cyprus has said it acts in compliance with applicable laws. It declined to comment on the specific allegations, saying the documents are more than 20 years old.

Lawmakers question the watchdogs

Wednesday's hearing turned into a review of why none of the island's regulators had acted. Several authorities told lawmakers they had no power over events that took place before they were set up, or no power to bring criminal cases.

Andreas Zachariadis, permanent secretary of the finance ministry, said the audit oversight board, which regulates auditors and has been examining Deloitte Cyprus since the allegations surfaced, has no power over events before it was set up in 2017 and can only take disciplinary action.

The Central Bank of Cyprus said it was checking whether any Cypriot bank was involved but had not identified one. The anti-money laundering unit said it had received no report on the case and could help the police if asked. Tax Commissioner Soteris Markides warned that time limits apply to the tax years that can still be examined.

"We are not here merely to say that these things happened years ago," said committee chairman Demetris Demetriou, a lawmaker from the Democratic Rally party.

Christos Christofides, a lawmaker from the left-wing party Akel, said tax cases completed in 2016 remained open to review and called the money at stake "money of the Cypriot people that could go to our education, to health, to people in need and not end up with billionaires."

Sanctions and other cases

The Cypriot police probe adds to the legal pressure Abramovich has faced since Britain sanctioned him as an associate of Russian President Vladimir Putin after Russia's full-scale invasion of Ukraine in 2022. The sanctions forced him to sell Chelsea. The £2.5 billion ($3.3 billion) from the sale has been frozen since, and Britain has threatened to sue him to release it for victims of the war in Ukraine.

In Jersey, about $7 billion of his assets remain frozen as part of a criminal investigation now in its fourth year. His lawyers deny the allegations and say that probe was "undertaken for political purposes." Britain also sanctioned MeritServus and Dimitris Ioannides, a former president of Deloitte Cyprus later linked to MeritServus, in 2023.

In a separate case in Cyprus, two former directors of Blue Ocean Yacht Management, the company that managed Abramovich's superyachts, are due to stand trial at the Limassol district court on Nov. 26 over €25 million ($28 million) in unpaid value-added tax. The yachts were worth about €1.2 billion ($1.35 billion) together.