Date: 2024-05-18 Page is: DBtxt003.php txt00025957
RUSSIAN OLIGARCHS
Alexey Mordashov
Alexey Mordashov
Original article: https://www.icij.org/investigations/cyprus-confidential/oligarchs-offshore-clients/
Peter Burgess COMMENTARY
Peter Burgess
Alexey Mordashov
Severgroup LLC founder
Entities in the leak:
64 Companies
Sanctioned by:
United States - 2022
European Union - 2022
Offshore providers:
Cypcodirect
About:
Alexey Mordashov is a steel tycoon and one of Russia’s richest people, with an estimated net worth of nearly $21 billion, according to Forbes magazine. He is the founder and general director of Severgroup LLC, a Cherepovets-based conglomerate that holds shares in steel mining giant, Severstal, as well as companies across a range of sectors, including forestry and tourism. Severgroup’s investments also included a media company described by the U.S. Treasury Department as “a pro-Kremlin empire of television, radio, and print organizations.”
Previous ICIJ investigations revealed how Mordashov used shell companies to invest in Bank Rossiya, which European Union authorities consider “the personal bank” of Russian senior officials, and to carry out multimillion-dollar deals with entities belonging to Sergey Roldugin, a close friend of Russian President Vladimir Putin. After Russia’s invasion of Ukraine in 2022, the U.S., the EU and other governments sanctioned Mordashov, members of his family — including Marina Mordashova, whom the EU has identified as his wife — and some of his companies. A 2022 EU document detailing the bloc’s sanctions against Russian elites accuses the businessman of “benefiting from his links with Russian decision-makers.” He has repeatedly denied any involvement in politics.
Cyprus connections:
According to leaked data analyzed as part of ICIJ’s Cyprus Confidential investigation, Mordashov is the beneficial owner or shareholder of 64 shell companies, 46 incorporated in Cyprus, as well as 18 in the British Virgin Islands (BVI) and the Isle of Man. Many of these entities are subsidiaries of Unifirm Ltd., his Cyprus-based holding company. Nearly all were administered by PwC Cyprus and Cypcodirect, a local financial services provider.
On Feb. 28, 2022, minutes before EU authorities announced sanctions against Mordashov, officers at Cypcodirect approved the transfer of shares from two of his companies to a BVI entity named Ondero Ltd.
Confidential files in the Pandora Papers data trove show that Ondero’s owner was Mordashova. The leaked corporate records describe the Russian woman as “receiving financial support from Mr. Alexey Mordashov as she is the mother of his children.” She was not sanctioned at the time. The move, ICIJ found, was part of a bid to help Mordashov elude sanctions by transferring control of his $1.4 billion stake in TUI Group, a German travel conglomerate. Avgi Lapathiotis, a Cyprus Ministry of Finance official, told ICIJ media partners that “a criminal investigation is being carried out” on the share transfer but didn’t specify which agency is in charge of the probe.
The Cyprus Confidential investigation also reveals that, in 2018 and 2019, shell companies linked to Mordashov were used to pay about $700,000 to a renowned German journalist to write a book about Russian politics.
Number of companies and trusts in the leak:
64 offshore companies tied to Alexey Mordashov appear in the leaked data. Out of those, there are 46 Cypriot companies (some of which are subsidiaries of conglomerates in which Mordashov has controlling stakes), and 18 registered in the British Virgin Islands and the Isle of Man. Cypcodirect provided services to 41 Cypriot companies, almost always in tandem with PwC.
Response:
Through a spokesperson, Mordashov told ICIJ that “not once in his long career did [he], or any of the companies he runs, breach any laws, whether in Europe, Russia, or any other jurisdictions,” and that “[e]verything he has built and achieved was accomplished through fair business practices and strict compliance with regulations,” including the TUI share transfer.
A spokesperson for TUI told Paper Trail Media that Mordashov’s share transfer to his partner Mordashova was not valid and that, due to sanctions, “his shareholding has been significantly reduced.”
A Cypcodirect spokesperson declined to comment on the firm’s clients citing confidentiality reasons, and added that the firm “has always been working in line with Applicable Laws and Regulations.”
PwC did not comment on its work for Mordashov citing confidentiality issues. In a statement to ICIJ the firm said that “[a]ll PwC firms, including PwC Cyprus, take the application of sanctions against clients and sanctions prohibiting various professional services extremely seriously” and that “following the Russian invasion of Ukraine, PwC Cyprus has terminated relationships with approximately 150 client groups.”