Espreso. Global

Well-known Western audit firm PwC may have assisted Russian oligarchs — investigation

15 November, 2023 Wednesday
14:09

The well-known audit firm PwC allegedly helped Russian oligarch Oleg Deripaska "save" a superyacht from sanctions, and another - Alexei Mordashov - "save" $1.4 billion, according to the Cyprus Confidential investigation

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This is evidenced by the global Cyprus Confidential investigation, in which 270 journalists and 69 media outlets under the auspices of the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media analyzed a leak of 3.6 million documents from six Cypriot companies.

After the start of Russia's large-scale war against Ukraine and the imposition of sanctions on Russian assets, the companies received requests to re-register their Russian assets to avoid freezing or seizure.

A few days after Deripaska was sanctioned, PwC Cyprus and Cypcodirect helped his shell company transfer control of the $70 million superyacht Clio to a new captain. 

"A group of PwC partners in Nicosia signed off on a stack of paperwork establishing how it would be managed. The ship spent years sailing unobstructed between some of the world’s most alluring destinations," the investigation says.

Although following the Russian invasion of Crimea, some parts of Alexei Mordashov's business empire were subject to US sanctions, PwC and Cypcodirect continued to work with them. 

For example, in 2018, the US imposed sanctions on his turbine manufacturing company Power Machines for supporting Russia's annexation of Crimea. The company tried to create a Russian-controlled energy supply system on the occupied peninsula. Despite this, PwC and Cypcodirect continued to advise the company.

On March 1, 2022, the day after EU sanctions were imposed on Mordashov, PwC Cyprus and Cypcodirect exchanged messages marked "URGENT" and "PLEASE APPROVE". The messages concerned transactions that would have helped Mordashov avoid a $1.4 billion freeze on his investment in the German travel company TUI Group. The plan was to transfer these assets to the name of Marina Mordashova, the Russian oligarch's wife.

In July 2022, she also came under EU and US sanctions. The German government and TUI recognized the transfer of these assets as invalid, and the Cypriot government opened a criminal case in this regard. PwC Cyprus stated that the company was not aware of this criminal investigation.

Investigators learned about these details from the documents of Cypriot corporate services provider Cypcodirect Ltd, which worked in conjunction with PwC Cyprus. The leak includes correspondence between employees of these companies and documents prepared for clients.

According to the leak, the documents for Mordashov's signature to close the deal were sent after the EU had announced sanctions against the oligarch. Therefore, this requires investigation, as it may mean that PwC Cyprus may have violated EU sanctions.

PwC is one of the four global giants in the field of audit and consulting services. The Cyprus office of the PwC network with 1,100 employees did a lot to create a favorable climate in Cyprus for Russian money, according to the investigation. For example, in 2012-2021, Evgenios Evgeniou, CEO of PwC Cyprus, headed the Cyprus-Russia Business Association, which lobbied to strengthen ties between Cyprus and Russia.

  • The G7 countries will review sanctions against Russia and impose new ones if necessary, German Chancellor Scholz says.
  • The Office of Foreign Assets Control of the US Department of Treasury has announced a large-scale package of sanctions against 130 individuals and legal entities that help Russia supply technology for military production.
  • On October 27, European Commission President Ursula von der Leyen said that the EU was preparing the 12th package of sanctions against Russia.
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