Deloitte Cyprus accused of helping forge documents to erase Abramovich's $672 million in assets

According to a joint investigation by BBC Panorama and the Bureau of Investigative Journalism, the Cyprus branch of the world's largest accounting firm Deloitte has been accused of participating in forging documents to help Russian oligarch Roman Abramovich erase assets from the books and evade substantial taxes.

The investigation shows that in accounts of Abramovich-owned companies signed off by Deloitte Cyprus, superyachts, mansions and private jets worth approximately $672 million (£50.8 million) disappeared from the books. Senior counsel Andrew Mitchell, a financial services legal expert, told the BBC that the evidence in the program showed this was a "blatant" act of tax evasion, "as obvious as can be."

The investigation also exposed a backdated document tax avoidance scheme devised by MeritServus, Abramovich's former advisory firm. The first operation involved a Cyprus company called Kravin Investments under Abramovich's name, which held nearly $2 billion in its bank account in 2003 and generated substantial interest income that should have been taxed by Cypriot tax authorities.

An email sent in August 2005 from MeritServus to Abramovich's Russian partners showed that they devised the plan after meeting with Deloitte, and the email read: "If you agree, it will be necessary to make changes to the 2003 and 2004 financial statements and accounting records accordingly." The email further informed the Russian side that Kravin's "provisional tax assessment for 2005" would be filed with no interest income. A month later, the Russian side replied via email saying "agreed."

MeritServus subsequently produced a series of backdated documents falsely claiming Kravin merely held and invested funds on behalf of its British Virgin Islands parent company, making it appear that it did not truly own the money, thereby avoiding the need to pay tax in Cyprus. In an email from September 2005, Deloitte wrote that due to the backdated changes to Kravin's assets, "the relevant accounts (bank account balances, interest income, profit and loss account) must be changed." The report accordingly pointed out that Deloitte is suspected of providing professional advice for forged financial records, enabling Abramovich's companies to evade millions in taxes.

The second operation involved Electus Investments, a Cyprus company in which Abramovich held over $10 billion in assets. Through backdated documents, MeritServus transferred the beneficial ownership to another company of the same name but registered in the British Virgin Islands, whose accounts did not need to be publicly disclosed, with the date backdated to November 20, 2003. When this Cyprus company's accounts were made public, the value of its assets showed only $145,000 — the oligarch's billions "vanished into thin air."

Cypriot MP Christos Christoforidis said that if taxes were indeed evaded, "we must look at how to recover the taxes, and if anyone is guilty, they must be punished according to law." Lord Sikka, Professor of Accounting at the University of Sheffield, described the practice of backdating transaction dates and failing to publish true and fair accounts as a "breach of statutory duty" and "quite a scandal."

Abramovich's legal team denied tax evasion or concealment of wealth, stating that there is no evidence showing he personally knew of, authorized or instructed the forging of any documents, and noted that relying on professional advice is a legitimate practice. Deloitte Cyprus responded that the company "acts in accordance with applicable law."

The context of the affair reveals a deeper irony: after Russia's full-scale invasion of Ukraine in 2022, the British government imposed sanctions on Abramovich on the grounds of his ties to President Putin, forcing him to sell Chelsea Football Club. However, the BBC report cited related sources pointing out that Abramovich currently resides in Turkey, where he can live safely because the country has not imposed sanctions on him. In Jersey in the Channel Islands, £5.4 billion of Abramovich's assets remain frozen, and related criminal investigations have lasted four years. His lawyers told the BBC that he denies all charges in the Jersey investigation and calls the investigation "politically motivated."