A new leak of millions of documents dubbed the Pandora Papers has revealed more details of the use of offshore companies by the elite of New Europe, detailing their ownership of hundreds of millions of dollars of assets and a vast network of offshore holdings, reported the Organised Crime and Corruption Reporting Project (OCCRP) on October 3.
The revelations come from millions of files from 14 offshore service providers leaked to the International Consortium of Investigative Journalists and shared with partners around the world, including OCCRP. More than 75 journalists in the OCCRP collective worked on the documents along with more than a dozen other publications to reveal the details of the deals and assets.
While the graphics accompanying the release of the Pandora Papers feature Russian President Vladimir Putin’s face in most versions, the OCCRP admitted that they have no link to Putin in the latest investigation.
“Putin’s face virtually centrepiece in “Pandora dossier” leak on the Guardian,” Murad Gazdiev, a prominent RT reporter, said in a tweet. “And only half way through are you told that 'we didn’t actually find Putin’s name in the data leak', instead they found Putin’s father’s friend’s son. Good enough, apparently.”
However, the reports contain details of the secret financial arrangements of Ukrainian President Volodymyr Zelenskiy, family holdings of Azerbaijan’s President Ilham Aliyev, and transactions of former Kazakh President Nursultan Nazarbayev and Czech Prime Minister Andrej Babis, who is currently standing for re-election, amongst many others.
The allegations against Babis are amongst the mildest, but claim that he failed to declare an offshore investment company in the British Virgin Islands (BVI) and used it to purchase two villas for GBP12m (€14.04mn) in the south of France in 2009. There were secret loans of €15mn to other shell companies he owned in the US and Monaco. The money was eventually invested in the luxury French real estate assets.
The origin of the money is unclear, as is the reason billionaire Babis would try to hide his connection to the funds. Financial crime experts described the scheme as “a textbook example of money laundering,” OCCRP reported.
Babis, who is running for re-election this week, started a political party that strongly opposes corruption among the political classes. He has spoken out against the use of tax havens in the past.
Babis has goaded rivals who have used offshore companies to evade public scrutiny. Shortly after the 2016 publication of the Panama Papers, based on a leak of offshore documents, OCCRP said: “I think everyone who does business knows that Panama is not exactly a territory where they do business transparently.” It added: “But at the same time, Babis was himself making extensive use of offshore jurisdictions, using them to move millions of euros through the international financial system and invest them in luxury French real estate, a new leak of offshore documents reveals.”
Ukrainian President Volodymyr Zelenskiy, who was elected on a platform of fighting corruption in April 2019, and his aides are also caught in the scandal.
Zelenskiy and his partners in comedy production owned a network of offshore companies related to their business based in the BVI, Cyprus and Belize, which OCCRP claims were used to hide asset ownership and move money around secretly.
"Zelenskiy’s current chief aide, Serhiy Shefir, as well as the head of the country’s Security Service, were part of the offshore network. Offshore companies were used by Shefir and another business partner to buy pricey London real estate,” journalist Christopher Miller said in a tweet.
In September, there was an attempt on Shefir's life when a gunman opened up on his car with a machine gun. Shefir was unhurt but his driver was hospitalised in a serious condition.
Around the time of his 2019 election win, Zelenskiy handed his shares in a key offshore company over to Shefir, but the two appear to have made an arrangement for Zelenskiy’s family to continue receiving money from the offshore, OCCRP reports.
“The documents show that Zelenskiy and his partners in a television production company, Kvartal 95, set up a network of offshore firms dating back to at least 2012, the year the company began making regular content for TV stations owned by Ihor Kolomoisky, an oligarch dogged by allegations of multi-billion-dollar fraud. The offshores were also used by Zelenskiy associates to purchase and own three prime properties in the centre of London,” OCCRP reported.
The documents also show that just before Zelenskiy was elected, he gifted his stake in a key offshore company, the BVI-registered Maltex Multicapital Corp., to his business partner Shefir. However, the documents show the company continued to pay dividends, but to a company now owned by Zelenskiy’s wife. Those allegations were not proved, but have now partly been confirmed by the latest document leak. The documents reveal that Zelenskiy and his partners used companies based in the BVI, Belize and Cyprus.
Zelenskiy has been accused of corruption before and of having business ties to oligarch Ihor Kolomoisky, who bankrolled his presidential campaign and supported it with his media empire. Former President Petro Poroshenko published a chart on Facebook during the election campaign purporting to show that Zelenskiy and his television production partners were beneficiaries of a web of offshore firms that allegedly received $41mn in funds from Kolomoisky’s PrivatBank, before its nationalisation in 2016.
The Pandora Papers also show a network company was used to purchase an apartment in London just a short walk from the museum that now stands at 221b Baker Street, the address of Sir Arthur Conan Doyle’s legendary detective Sherlock Holmes, that was bought for GBP2.3mn in 2016 by a Belize company owned by Shefir, SHSN Ltd. A two-bedroom flat nearby in Baker Street’s Chalfont Court building, which was bought by Shefir for GBP2.2mn ($3.5mn) in 2014, was also transferred to SHSN Limited in 2018.
There is no sign that Zelenskiy himself was a part of the London property deals. However, the documents show that he was a key player in other parts of the offshore network.
At the centre of the web of foreign firms is Maltex Multicapital Corp, which has never before been linked to Zelenskiy. By 2017, Maltex was divided equally between shell companies belonging to Zelenskiy, Iakovlev and brothers Serhiy and Borys Shefir.
Zelenskiy, together with his wife, owned a quarter of Maltex through a Belize-registered firm called Film Heritage. But in 2019, in the heat of Zelenskiy’s election campaign, Film Heritage transferred its ownership of Maltex to another company owned by Serhiy Shefir, the soon-to-be presidential chief assistant.
Maltex continued to pay dividends to Zelenskiy’s Film Heritage – even though it no longer owned any stake in the company. A document showed that the company’s five largest sources of revenue were Ukraine, Belarus, Russia, Belize and Cyprus.
Since 2019, Zelenskiy’s wife, Olena Zelenska, has been the sole beneficial owner of Film Heritage, according to the online registry of officials’ asset declarations, but there is no information on the size of the payments.
The children of Azerbaijan’s President Ilham Aliyev are revealed by the leak as owning tens of millions of dollars of luxury property.
The revelations could prove embarrassing for the UK government, as the Aliyevs appear to have made a GBP31mn profit after selling one of their London properties to the Crown Estate – the Queen's property empire that is managed by The Treasury and raises cash for the nation, the BBC reports.
Aliyev’s daughters were shown to own the Sofitel luxury hotel on the man-made Palm Jumeirah island in Dubai. The two plots on which the Sofitel is built are held by a Dubai-registered company called Sahra FZCO, according to records obtained by OCCRP.
Sahra is jointly owned by Leyla and Arzu Aliyeva, claim sources who have spoken on condition of anonymity to the Daphne Project, a collaboration of 18 news organisations, including the Guardian, Reuters and The New York Times.
In addition, Sahra appears to have acquired 16 villas on nearby Jumeirah man-made archipelago set within a lagoon. Its villas, placed among water features and lush gardens, cost an average of GBP2mn each and the plots, registered in their names, are worth approximately GBP70m, as cited by the Guardian.
The files also show how the family – long accused of corruption – bought 17 properties, including a GBP33mn office block in London for the president's 11-year-old son Heydar Aliyev. The building in Mayfair was bought by a front company owned by a family friend of President Ilham Aliyev in 2009. It was transferred one month later to Hedyar, the BBC reports.
The unofficial third wife of Kazakhstan’s former president Nursultan Nazarbayev received $30mn apparently for almost nothing, reports OCCRP.
“Assel Kurmanbayeva’s relationship with the 'Leader of the Nation' – a title Nazarbayev holds for life – has never been officially confirmed or denied. But rumours have swirled about her status as his tokal, or unofficial wife, since she won the Miss Kazakhstan beauty pageant as a teenager in 1999. Images of her two sons’ passports leaked to news sites showed that they use the surname 'Nursultanuly,' as would be the custom in Kazakhstan for the children of a man named 'Nursultan,'" OCCRP said in its report.
Now 40 years old, Kurmanbayeva is the artistic director of two state-run dance institutions and owns several firms involved in ballet and national dance.
The $30mn payment has been linked to two oligarchs, long rumoured to be Nazarbayev’s confidants: Vladimir Ni and Vladimir Kim, who made their fortunes in Kazakhstan’s natural resource sector.
“The $30mn payment to Kurmanbayeva was structured as a sale, in which she gave up her stake in a mysterious BVI company that appeared to do no business. She received the money two months after Ni’s 2010 death from a company taken over by his daugher; Kim was a witness to the payment,” OCCRP reported.