Roman Abramovich quits political post to hang on to Chelsea

 

Roman Abramovich yesterday chose Chelsea over Chukotka, the Russian province where he has been a local politician since 1999.

Following a decree from President Vladimir Putin last month that state officials may no longer hold shares or bank accounts abroad, the billionaire Chelsea Football Club owner yesterday renounced his post as chairman of the far-flung region's parliament.

The move means he will be able to retain his beloved football club as well as a host of other assets, mainly in London. Mr Putin's move was intended to stem corruption among some of Russia's officials by preventing them from spiriting ill-gotten funds into foreign bank accounts or money laundering investments in London, Cyprus, Switzerland and other financial centres.

Mr Abramovich, who is not accused of any wrongdoing, first became interested in the region back in the 1990s when having a seat in the national parliament, or Duma, became a must-have accessory for wealthy Russians.

He was approached by the governor of the province and became its representative, quitting the Duma two years later when he successfully ran for the governorship of the province. He took advantage of its low tax regime to move many of his Russian business interests to be domiciled there, including the vast Sibneft oil company.

Although the tax rate was low, his move still meant a huge inflow of new tax revenues for the region. His Millhouse group, based until recently at Chelsea's Stamford Bridge ground, invested heavily in exploiting gold, copper and other projects in the region, in some cases selling them on to UK companies like Highland Gold.

Mr Abramovich is able to remain a major shareholder in Highland thanks to his renouncing of the Chukotka role.

A spokesman said he would continue investing in humanitarian and social projects in the region.

Some oligarchs have retained their public posts by putting their foreign assets into charitable trusts.

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