Moscow money in the Mediterranean

Leaked documents show Cyprus firms linked to Russian billionaires played key role in the Kremlin’s backdoor dealings

Journalists from 69 global media outlets working under the auspices of the International Consortium of Investigative Journalists (ICIJ) and the German publication Paper Trail Media have published a new investigation titled Cyprus Confidential. The reporting relies on 3.6 million leaked documents from six Cypriot companies described as “financial enablers.” Among other findings, the journalists uncovered that Russian oligarch Roman Abramovich, who has long denied having any connections with Vladimir Putin, sold a quarter of the shares of one of Russia’s largest advertising holdings to entrepreneurs close to the Russian president in 2010. Additionally, the project’s investigators determined that Hubert Seipel, a German journalist who has written multiple books praising Putin, received hundreds of thousands of euros from offshore accounts linked to Russian billionaire Alexey Mordashov. Meduza outlines some of the investigation’s key findings.

Roman Abramovich sold his stake in an advertising firm to Putin’s friends

In September 2003, two Cypriot companies called Finoto Holdings and Grosora Holdings purchased 25 percent of the shares in Video International, a major Russian advertising holding company. At the time, according to the BBC, Video International “enjoyed a dominant position” in Russia’s domestic TV advertising market and was “half a step away” from the Kremlin.

Each of the companies paid just $130,000 for 12.5-percent stakes in Video International. According to journalists who analyzed newly leaked records, an entity called the Sara Trust Settlement owned both companies through a series of intermediaries — and its ultimate beneficiary was Roman Abramovich.

The following year, Abramovich received $1.8 million in dividends from the company — seven times what he had paid for the shares.

In December 2010, Finoto Holdings sold its share of another Cypriot company called Med Media Network, which nominally belonged to cellist Sergey Roldugin, a close friend of the Russian president who E.U. investigators who studied the Panama Papers in 2016 referred to a “Putin’s wallet.”

On the same day, Grosora Holdings sold its own stake in the company to Namiral Trading Ltd, a company with ties to Alexander Plekhov, an entrepreneur close to Rossiya Bank founder Yury Kovalchuk. The total value of the two sales amounted to $40 million.

According to the independent Russian outlet iStories, which took part in the ICIJ investigation, Abramovich’s role in the Video International deals was not previously known publicly. For years, observers assumed 100 percent of the company’s shares had been sold to entities associated with Yury Kovalchuk.

After the start of the full-scale war in Ukraine, Alexander Plekhov came under U.K. sanctions for his ties to Vladimir Putin, while Sergey Roldugin was sanctioned by the U.K., the E.U., and the U.S. Washington dubbed the musician “the custodian of President Putin’s offshore wealth.”

In the spring of 2023, the Swiss prosecutor’s office, which was investigating cases involving managers of Gazprombank’s Swiss affiliate, referred to Roldugin and Plekhov as “straw men” for Rossiya Bank, which the U.S. government has referred to as “Putin’s personal cashbox.”

Abramovich has long denied having any connections with Putin. In 2010, a representative of the billionaire stated that he had “no financial relationship” with Putin, who was prime minister at the time.

In 2021, Abramovich sued journalist and former Financial Times Moscow correspondent Catherine Belton over an excerpt from her book Putin’s People that said Abramovich had purchased Chelsea Football Club at Putin’s request. Abramovich won the case in a London court, and the book’s British publisher, HarperCollins, agreed to change the text and apologize to the businessman.

Abramovich did not respond to journalists’ questions regarding the Cyprus Confidential findings. Sergey Roldugin and Alexander Plekhov also declined to comment.

Generous payments to a top German ‘Russia expert’ for books about Putin

Another part of the investigation links Russian billionaire Alexey Mordashov to the German journalist Hubert Seipel, who has authored multiple complimentary books and films about Vladimir Putin.

In 2012, Seipel wrote and directed the film I, Putin: A Portrait, which was nominated for a German TV award for best documentary. In 2015 and 2021, he published the books Putin: The Logic of Power and Putin’s Power: Why Europe Needs Russia, both of which became bestsellers. Seipel has met with Putin multiple times and is considered one of Germany’s leading Russia experts. His public statements, meanwhile, often echo the Russian president’s own rhetoric.

The Cyprus leak reveals that in 2018, Seipel signed a “sponsorship agreement” for the creation and promotion of a book about the “political climate in Russia.” The deal ultimately led to the publication of Putin’s Power by the Hamburg-based publisher Hoffmann und Campe. According to the agreement, Seipel received at least 600,000 euros ($653,000). In addition, the document also contains a handwritten note that reads, “Similar to the 2013 agreement: biography of Putin.” This suggests the same sponsor paid Seipel for his earlier book on Putin.

The payment was made by a British Virgin Islands company called De Vere Worldwide Corporation, which is registered under the name of Igor Voskresensky, one of the directors of the Russian energy company Power Machines. The witness’s signature on the agreement belongs to Dmitry Fedotov, the head of the legal department of the steel company Severstal.

The funds for Seipel’s payments were issued to De Vere Worldwide from offshore accounts whose beneficiary was billionaire Alexey Mordashov, the owner of both Power Machines and Severstal. In 2018–2019, two of Mordashov’s offshore entities transferred a total of 610,000 euros ($664,000) to De Vere Worldwide.

In an interview with Paper Trail Media, Seipel admitted that Mordashov sponsored his books about Putin. However, he disputed that idea that this discredits the books themselves, saying the sponsorship agreements with De Vere Worldwide included a clause stating that he was under no obligation to his sponsor regarding the books’ contents. He also described Mordashov as an “entrepreneur who sponsors projects with private funds.”

Hoffmann und Campe said in a statement that it reserves the right to take legal action against Seipel for concealing the conflict of interest.

Alexey Mordashov, who Forbes lists as Russia’s fifth-richest billionaire, did not respond to journalists’ requests for comment.