Roman Abramovich could owe the UK £1bn over tax fraud that helped fund Chelse

Roman Abramovich could owe  the UK £1bn over tax  fraud that helped  fund Chelsea FC.
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BBC A composite image with a portrait of Roman Abramovich in a suit  in the centre.  Behind, in a blue and  yellow colour scheme, is a map of the British Virgin Islands and a view  from the top of the Stamford  Bridge stands, with part of the words "Chelsea Football Club" and the  club's lion  crest. BBC
Sanctioned Russian oligarch Roman Abramovich could owe the UK up to £1bn after a  failed attempt to avoid tax on hedge fund investments, evidence seen by the BBC  suggests.
Leaked documents reveal  that investments worth $6bn (£4.7bn) were  channelled through companies in the British Virgin Islands (BVI). But evidence suggests they were managed from the UK,  and so should have been taxed  there.
Some of the money that funded Chelsea FC when Mr Abramovich  was its owner can be traced to companies involved in the scheme, the BBC and the Bureau of Investigative Journalism  (BIJ) have also  found. The oligarch's lawyers said he  "always received independent professional  legal and tax  advice" and  "acted in accordance with that  advice."
Abramovich – who now divides his time between Istanbul, Tel Aviv and the Russian resort of Sochi  – denies any knowledge of or  personal responsibility for any unpaid  taxes.
Joe Powell, a Labour MP who leads a  parliamentary group on fair taxation,  has called on HM Revenue and Customs to investigate the  matter "urgently" to recover what could be  "very significant  sums of money that could be invested in public  services."
At the  centre of the scheme was Eugene Shvidler, a former Chelsea FC director and a billionaire businessman in his own right, who is currently challenging the UK  government's decision to sanction him  over his close links  with Abramovich.
Shvidler moved to the  United States after  Russia invaded Ukraine, but from 2004  to 2022 he lived in the  United Kingdom, with properties in London and  Surrey. A tax expert told the BBC that evidence  showing Shvidler  made strategic  investment decisions while based in the UK, not the  British Virgin Islands, was  "compelling evidence", suggesting  that the companies should have been  taxed in the UK.
Mr Abramovich's lawyers
They said the  "investment structure" was "the subject of very careful and detailed tax  planning undertaken and advised by leading tax  advisers".
The scheme involving Mr Abramovich's hedge fund investments was revealed in a  major data leak that the BBC and the  Office of Investigative Journalism have been examining for  more than a year - thousands of files and emails from a Cyprus-based company that  manages Mr Abramovich's global  empire. .
Eugene Shvidler, right, is a former Chelsea FC  manager and  a long-time friend of Mr  Abramovich.
The BBC and its media partners, including The Guardian, have  reported on the files  discovered since 2023 as part of the International Consortium of Investigative Journalists'  confidential Cyprus investigation. On  Tuesday we  learned how  Mr. Abramovich  avoided paying millions  of dollars in VAT on the  operating costs of his yacht  fleet.
Leaked records show how Abramovich invested  much of the wealth he acquired in the 1990s through a corrupt deal  – investing in a  British Virgin Islands company called Keygrove Holdings  Ltd.
A network of British Virgin Islands companies owned by Keygrove invested this money  – up to  $6 billion (£4.8 billion) between the late 1990s and  the early 2020s  – in Western hedge funds, according to the leaked  files.
These investments  brought the oligarch  around $3.8 billion in profits over almost two decades. By making investments through  British Virgin Islands companies, which do not pay corporate tax, the  system appears to be  designed to ensure  that the least possible tax  is paid. "Unlimited power"
It is not  uncommon for  companies to legally avoid paying  taxes on their profits by  investing in companies  located in tax havens. But the companies  in question must be managed and controlled  outside the country where they are  incorporated.
If the strategic decisions of an offshore  company are  made by  a person in the UK, its profits  can be taxed as if it were a UK  company.
Leaked documents show how directors of investment companies  in the British Virgin Islands gave Mr. Shvidler, who  lived in the UK and  obtained British citizenship in  2010.
The BBC has seen documents  from the "attorney general" dated between 2004 and 2008,  which gave him  "the broadest possible powers" and  "absolute authority to do  anything and  everything" for the islands' investment  companies. Since 2008,  Mr. Shvidler appears to have  taken over the  management of Keygrove's investments, which owns the  British Virgin Islands companies, through another  company.
Millennium Capital Ventures Ltd, which was  indirectly owned by  Mr. Shvidler's wife and appointed him as a director in 2000, became  Keygrove's investment manager. It was  given "full power and authority to  oversee and  direct" the investment of the assets,  "all without prior consultation with  the client."
"Strong evidence"
New evidence of  Mr. Shvidler's pivotal role in the investment decisions of the  British Virgin Islands companies  has emerged in a September 2023  lawsuit filed by the  U.S. Securities and Exchange Commission (SEC) against a New York  company called Concord  Management.
The SEC filing  shows that Concord had only one client,  as he was identified as  Mr. Abramovich. The  firm advised  the British Virgin Islands oligarchs' companies on  their investment  decisions.
It identifies a  "long-term close  associate" of Mr Abramovich,  called "Person B", who  "made investment  decisions" for Mr  Abramovich.
It says he was  the "point of contact for receiving investment  advice" and  "for making or communicating the decision to  proceed with  the recommended  transactions".
Using the leaked documents, the BBC was able to identify  "Person B" as Eugene  Shvidler.
The evidence suggests  that Mr Shvidler  made the decisions  outlined by the  SEC in the management and  control of Mr  Abramovich, from the UK  and not from the  British Virgin Islands.
Tax expert Rita de le Feria told the BBC that  the evidence  that a UK  resident like Mr. "I think this is  irrefutable evidence." "This constitutes, once again, strong evidence that the  current management of the company was not in the  British Virgin Islands," she said.  Mr. Abramovich's lawyers said  that, in addition to the advice he  had received on his tax affairs, he  "expected that similar advice  would have been sought" by those  responsible for  managing the companies  he owned. The leaked documents also reveal how  vast amounts of  Mr. Abramovich's untaxed profits  flowed through  the oligarch's network of companies before  being paid to Chelsea FC. The hedge  fund's investments  were then returned to his companies in the  British Virgin Islands and then  to Keygrove,  its parent company. Keygrove then  lent money to other companies in  Abramovich's network, which in turn lent money to Camberley International Investments Ltd  – a company set up to  finance Chelsea FC.  In 2021, when Chelsea won the Champions League,  the Club World Cup and  the UEFA Super Cup, hundreds of millions of dollars in loans to the club could be traced back to companies  that benefited from  Abramovich's tax-free investments.

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