Hundreds of millions of pounds of state assets believed to have been owned or used by the ousted Ukrainian President Viktor Yanukovych and his circle, including his now-notorious country mansion, are alleged to have been funnelled through London front companies.
The luxury residence known as Mezhyhirya, famed for its taxpayer-funded petting zoo, life-sized Spanish galleon and golf course, was owned – allegedly on his behalf – through a company set up in London in 2008 with an address in Harley Street, according to investigations by the Open Democracy website.
It is claimed that Mr Yanukovych’s ownership of a hunting lodge in a vast forest estate nearby has been routed through the same London company.
Reports of the apparent UK links to so many Ukrainian former state assets served to increase pressure on Britain to freeze assets of those close to the Yanukovych regime. Switzerland, Austria and Liechtenstein imposed sanctions on the former President’s closest circle, including his son Oleksandr.
Britain’s lax rules on disclosing the beneficial ownership of companies and their assets has meant the UK’s Companies House has become a popular destination for foreign billionaires seeking to mask their wealth.
But investigators claim to have uncovered a trail leading from Mr Yanukovych in Ukraine to London and then on to other opaque offshore locations. A similar pattern is reported around the assets of those close to the former President, with assets allegedly held in secrecy offshore via UK companies controlled by entities in Belize, Panama and the Seychelles.
The $300m (£179m) Mezhyhirya mansion was privatised in 2007 and, until recently, was owned by a Ukrainian firm called Tantalit, whose director was said by Open Democracy to be Mr Yanukovych’s lawyer. Tantalit was controlled by an Austrian firm, Euro East, whose accounts said it was in turn owned by a British firm, Blythe (Europe) Ltd, established in Harley Street. The claims by Open Democracy have not yet been substantiated.
As the public mood grew more hostile to the President last autumn, another businessman close to the Yanukovych administration, Sergii Kluyev, said he had bought Tantalit and its huge debts. Mr Kluyev’s brother Andrey was Mr Yanukovych’s chief of staff and is reported to have been shot while fleeing Kiev last week. The Kluyev brothers, whose names were among those on the asset freeze list in Switzerland, are said to be worth hundreds of millions of dollars.
London-based Blythe (Europe) was also the owner of the former President’s hunting lodge, according to Open Democracy, and allegedly appears to be a shareholder in the firm behind the presidential helicopters and jets.
Meanwhile, according to the NGO PEPWatch, the hunting grounds surrounding the lodge are owned by another London company, Astute Partners Ltd. Accounts for Astute Partners and Blythe (Europe) show they were both established in London by a lawyer called Reinhard Proksch through an agency where he is also a director called Compaserve (Europe) Limited.
Mr Proksch did not respond to emails and phone inquiries to his office in New York. However, he told Reuters , “I am not a crook” and said he was currently co-operating with international authorities.
“I think that we have done nothing wrong… I’m looking to sort it out,” he said. He confirmed he had set up foreign companies for Ukraine business dealings including the hunting grounds although in a previous interview declared that “No link to Mr Yanukovych exists”, and that “all matters related to Blythe/Astute and former Ukrainian subsidiaries” had been cleared by Liechtenstein regulators.
The Independent’s sister newspaper in Russia, Novaya Gazeta, reported this week on a number of other firms used in Ukrainian government-related deals under which, it claimed, public assets were diverted out of the country to, or through, businesses based in the UK. The British firms are all classed as “limited liability partnerships” held by partners in offshore havens. The LLP structure allows for no names of individuals or directors to be given. The paper’s claims have not yet been substantiated.
* According to Novaya Gazeta, Highway Investment Processing LLP was at the heart of a Ukrainian scandal known as the Boiko’s Rig affair. Highway is said to have been used as an intermediary through which a state-owned gas company allegedly paid $150m over the odds for a rig in a deal blessed by the Ukrainian Energy Minister Yuri Boiko. It is not known where the alleged surplus ended up.
Incorporated in Cardiff, Highway was established by two partner companies in the British Virgin Islands (BVI) called Ireland & Overseas Acquisitions and Milltown Corporate Services. It has since become controlled by two partner firms in Belize.
* Ireland & Overseas and Milltown also established, at an address in London’s Earls Court Square, a partnership called Darton Management LLP. This, according to Novaya Gazeta, set up a grain trading empire which cornered the market on Ukrainian wheat. It was run by Igor Filipenko, said to be an associate of Mr Yanukovych’s business mentor. Darton’s latest accounts give an address in Elstree, Herts, and its partners have been changed from the BVI pair to two firms in the Seychelles.
* Darton shares its new address in Elstree with a partnership called BinCroft LLP. BinCroft was allegedly used to form the Ukrainian company Gazenergolizing, which won Ukraine government coal industry contracts worth a reputed £160m. According to Novaya Gazeta, the company is also linked to Mr Filipenko. The BVI partners have since been replaced by two new firms, this time in Panama.
* Fineroad Business LLP, set up at the same Cardiff address as Highway, also lists Ireland & Overseas Acquisitions and Milltown as its partners, although the duo have moved home from the BVI to Belize. The Ukrainskaya Pravda claims Fineroad owns the Kiev office building known as “Yanukovych’s helipad”. A high rise with a helicopter landing pad on the roof, this was made available by Kiev City Hall for the President’s use to allow him to arrive in the city by helicopter. The building is allegedly owned by a Ukrainian company called Amadeus, which was incorporated by Fineroad in Cardiff. Fineroad documents at Companies House say the partnership is now controlled by the same Seychelles companies that are behind Darton Management.
The ownership trail
Mezhyhirya mansion Reported to be worth up to $300m. Said to have been privatised in 2007 and bought by Tantalit, where the Yanukovych family lawyer was the director. Tantalit was controlled by Euro East of Austria, which was in turn owned by Blythe (Europe), based in London’s Harley Street. Blythe is owned by P&A Corporate Services in Lichtenstein. In September it was sold to one of Yanukovych’s allies.
The hunting lodge It too was said to be owned by Blythe (Europe) in London. The hunting grounds are alleged to be owned by Dom Lesnika, which is owned by Astute Partners, in Harley Street.
The helipad An office block with a helipad on the roof was allegedly given by Kiev City Hall for the use of the President but is now owned by a Ukraine company called Amadeus, incorporated by Fineroad in Cardiff. Fineroad is in turn owned by a partnership in the Seychelles.
The air fleet The contract to supply the President’s helicopters and jets was allegedly awarded, with no competitive tender, to Tsentravia, owned by a British Virgin Islands business in which Blythe was a major shareholder.