20/03/25

UK: UK lawmakers demand probe into Roman Abramovich’s alleged $1B tax evasion

As published on: weeklyblitz.net, Thursday 20 March, 2025.

A group of British lawmakers has urged an investigation into Russian billionaire Roman Abramovich’s offshore financial dealings, following revelations that his companies may have evaded up to $1.24 billion in taxes owed to the United Kingdom. The allegations stem from leaked documents analyzed by the BBC, The Guardian, and the Bureau of Investigative Journalism (TBIJ), which suggest that Abramovich’s offshore investments, amounting to $6 billion, were managed by a UK-based executive, making them potentially liable for taxation under British law.

Abramovich, who has been sanctioned by both the UK and the EU since Russia’s invasion of Ukraine in 2022, reportedly funneled billions into hedge funds via an elaborate offshore structure. The returns from these investments were allegedly used to sustain various segments of his business empire, including Chelsea Football Club, which he was forced to sell in 2022.

Central to the controversy is Eugene Shvidler, a British citizen since 2010, long described as Abramovich’s “right-hand man.” According to the leaked documents, Shvidler played a crucial role in managing the offshore investments. Under UK tax law, a company is considered a tax resident if its central management and decision-making occur within the country, regardless of where it is registered. The investigation suggests that Shvidler, as the key decision-maker, may have inadvertently established Abramovich’s companies as taxable entities in the UK.

Labour MP Joe Powell, head of a parliamentary group on fair taxation, formally called for an inquiry into the matter. In a letter to HM Revenue & Customs (HMRC), Powell emphasized the importance of investigating whether Abramovich’s companies had indeed bypassed tax obligations and demanded recovery of any unpaid amounts.

“People are rightly angry at wealthy individuals using complex corporate structures and British Overseas Territories to dodge tax while ordinary people pay their fair share,” Powell stated. He further insisted that HMRC must take robust action against tax avoidance schemes that exploit loopholes in offshore jurisdictions like the British Virgin Islands (BVI).

In response, HMRC declined to comment on any specific taxpayers or ongoing investigations. However, a spokesperson reaffirmed the agency’s commitment to ensuring tax compliance across all wealth brackets, stating, “We are continuing to lead international efforts to improve global transparency and are committed to ensuring everyone pays the right tax under the law, regardless of wealth or status.”

The latest findings are part of the larger Cyprus Confidential investigation, spearheaded by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media. The probe uncovered widespread financial secrecy in Cyprus’ financial services industry, enabling Russian oligarchs to obscure their wealth and circumvent international sanctions.

According to ICIJ’s analysis of 3.6 million leaked documents, nearly 800 companies and trusts were registered in secrecy jurisdictions for Russian individuals who had been sanctioned since 2014. Among them, Abramovich featured prominently, with key assets shielded through a sophisticated network of offshore companies.

The BBC and its investigative partners traced Abramovich’s investments through a BVI-registered entity, Keygrove Holdings Ltd., which was controlled by two Cyprus-based trusts. Until 2022, Abramovich was the sole beneficiary of these trusts before his five children were listed as successors—an apparent attempt to insulate his wealth from impending sanctions.

Keygrove Holdings owned multiple BVI firms, collectively channeling hundreds of millions into leading hedge funds in the US and the UK. Investigators identified over 200 hedge funds that benefited from Abramovich’s investments, with profits reportedly redirected back into his offshore network.

Financial experts argue that these profits should have been taxable in the UK, given Shvidler’s central role in managing the funds. Court records and leaked documents indicate that Shvidler exercised full control over strategic financial decisions, strengthening the case for HMRC to pursue the tax claim.

Further supporting the tax evasion allegations, a 2023 lawsuit filed by the US Securities and Exchange Commission (SEC) against Concord Management, a New York-based financial advisory firm, identified Abramovich as its sole client. The SEC claimed that Concord advised on investment decisions for Abramovich’s BVI firms, with these decisions ultimately made by a “longtime close associate” referred to as “Person B.” Investigative journalists concluded that this individual was Shvidler, linking him even more directly to the financial operations in question.

Tax law expert Rita de la Feria described the findings as a “smoking gun,” arguing that any strategic financial decision-making in the UK would subject the offshore companies to British tax liabilities. “If key investment decisions were made in the UK, the profits should have been taxed here,” she asserted.

While the exact amount of unpaid tax remains uncertain, a preliminary analysis by investigative media groups estimated that Abramovich’s hedge fund investments may have generated approximately $3.8 billion in profits by 2018. If taxed in the UK, this could translate to an unpaid tax bill of around $665 million, potentially ballooning to $1.2 billion with penalties and interest.

However, UK tax authorities are limited in their scope, as they can only investigate financial activity dating back 20 years. Nonetheless, lawmakers insist that every possible measure should be taken to recover any owed taxes, particularly amid the country’s ongoing cost-of-living crisis.

The Cyprus Confidential investigation also exposed another suspected tax avoidance scheme involving Abramovich’s luxury yachts. Documents suggest that five of his superyachts were registered under a Cypriot company, Blue Ocean Yacht Management, which then leased them to seemingly independent BVI firms. However, investigative journalists found that these BVI entities were secretly controlled by Abramovich himself.

By structuring the yacht ownership this way, the Russian billionaire potentially avoided millions in EU taxes. Cypriot MP Alexandra Attalides has since questioned her government on whether appropriate taxes were paid on these transactions, signaling potential further scrutiny from European regulators.

The Abramovich case underscores the UK’s broader struggle with financial transparency and corporate tax avoidance, particularly concerning its overseas territories. According to the Tax Justice Network, UK-affiliated offshore jurisdictions, such as the BVI, account for nearly a quarter of global corporate tax losses.

Phil Brickell, another Labour MP and member of the parliamentary group pushing for the investigation, emphasized the urgency of addressing systemic tax abuses. “The UK is in a cost-of-living crisis with schools, hospitals, and transport in desperate need of investment,” Brickell stated. “We cannot continue tolerating the industrial scale of tax abuse we are seeing in our offshore financial centers.”

The revelations about Abramovich’s offshore financial dealings have sparked renewed calls for tax justice and greater regulatory oversight of UK-linked tax havens. With mounting political pressure, HMRC may find itself compelled to investigate whether Abramovich’s complex offshore empire was, in fact, subject to UK tax laws.

As the UK grapples with economic challenges, the case serves as a critical test of the government’s commitment to enforcing tax laws equitably, regardless of wealth or influence. Whether this probe leads to significant financial penalties for Abramovich remains to be seen, but the controversy has already reignited debates over financial secrecy and corporate accountability in Britain’s offshore network.

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UK Tax evasion Roman Abramovich