Russia’s Pandora’s Papers: On the Path of Oligarch Money

The quest to track assets often fails because real ownership is hidden behind a series of mailboxes, corporations, foundations, and trusts. So the International Consortium of Investigative Journalists (ICIJ) and its partners reviewed the Pandora Papers published last year, linked them to other sources and focused on the business activities of Russian billionaires: the Pandora’s Papers Russia.

In Austria, ORF and “Profil” were involved in the processing. The research shows that with each wave of penalties, the assets are also moving. The money was actually transferred in 2014, when the first sanctions were imposed after Russia annexed Crimea. There were also major shifts in 2018 after the United States imposed sanctions on several oligarchs.

“Protecting the Family Wealth”

Peter Avin, Mikhail Friedman, German Khan and Alexei Kozmichev, the four founders of Russia’s Alpha Bank, are “closely linked” to Russian President Vladimir Putin in the European Union. In the early 1990s, they controlled a fortune across the British Virgin Islands. After the annexation of Crimea, they created more shell companies. For example, Owen set up a foundation in which he puts his assets on hold and thus protects them from penalties. In a statement to the ICIJ, Owen cited “securing the family fortune” as the reason for the reorganization.

The other few are very active. According to the research, Alexej Mordaschwo, a major shareholder in the TUI travel group, could be assigned to 60 offshore companies. Mikhail Guzyrev, founder of the Russian oil company RussNeft, and his brother can be linked to 80 mailboxes.

Fontana connection

Hermann Gref, head of the Russian Sberbank, former Minister of Economy, and since Friday – after the United States and Great Britain – also on the sanctions list in Europe, suspended about 75 million US dollars (about 69 million euros) in an opaque network of companies and institutions. In 2017, he transferred assets to his nephew – a very common practice that makes it difficult for international authorities to access the funds. There are also traces of the bypass lanes leading from Gref to Austria.

In 2020, two plots of land in Oberwaltersdorf, Lower Austria, on the site of Magna European headquarters, which has since been demolished, were changed hands for about nine million euros: the seller was Fontana Sportveranstaltungs GmbH, and owned 94 percent of it. Investor Siegfried Wolf. The sale was completely legal and was done in compliance with all legal regulations.

The buyer of one of the properties is Gray Schloss GmbH, based in Baden. This in turn belongs to a company in Liechtenstein. This is stated in the Treasury’s Beneficial Ownership Registry, which is designed to reveal the beneficial owners of businesses, accounts, real estate, yachts or aircraft.

Papers lead to Putin’s former deputy chief of staff

What the record doesn’t reveal is revealed by ICIJ’s data records, which can at least be traced back to 2019: According to them, the company’s sole shareholder in Liechtenstein is a Caribbean-based company that belongs to a family. Foundation in Liechtenstein. This, in turn, concerns Kirill Androso.

The Russian, born in 1972, has a brilliant career: the former deputy chief of staff of Putin, until 2016/2017 Chairman of the Board of Directors of Aeroflot and Russian State Railways, and today he is an investor and professor of economics at Moscow University. According to the Pandora papers, there is also a close working relationship between Androsow and the Gref family, the head of Russia’s largest bank, Sberbank, which is now under sanctions. This is Sberbank, which at its European headquarters in Vienna Siegfried Wolff was head of the supervisory board to the end.

Not all concerned responded to inquiries from ORF and “Profil”. Oberwaltersdorf municipality says it does not know who owns the property, nor what is being built there: “We have no information on the application.” This is due to the fact that there are already three two-story shells on the property’s stand, but it’s gorgeous.