A network of secret offshore deals and vast loans worth $2bn has laid a trail to Russia’s president, Vladimir Putin.
An unprecedented leak of documents shows how this money has made members of Putin’s close circle fabulously wealthy.
Though the president’s name does not appear in any of the records, the data reveals a pattern – his friends have earned millions from deals that seemingly could not have been secured without his patronage.
The documents suggest Putin’s family has benefited from this money – his friends’ fortunes appear his to spend.
The files are part of an unprecedented leak of millions of papers from the database of Mossack Fonseca, the world’s fourth biggest offshore law firm. They show how the rich and powerful are able to exploit secret offshore tax regimes in myriad ways.
The offshore trail starts in Panama, darts through Russia, Switzerland and Cyprus – and includes a private ski resort where Putin’s younger daughter, Katerina, got married in 2013.
The Panama Papers shine a particular spotlight on Sergei Roldugin, who is Putin’s best friend. Roldugin introduced Putin to the woman he subsequently married, Lyudmila, and is godfather to Putin’s older daughter, Maria.
A professional musician, he has apparently accumulated a fortune – having been placed in ostensible control of a series of assets worth at least $100m, possibly more.
Roldugin appears to have been picked for this role because of his lesser profile. He has denied in documents to bank officials in Switzerland and Luxembourg that he is close to any Russian public figures. He has also said he is not a businessman.
Yet the files reveal Putin’s longstanding intimate has a 12.5% stake in Russia’s biggest TV advertising agency, Video International, which has annual revenues of more than £800m. Previously, its ownership was a closely guarded secret.
Roldugin was also secretly given an option to buy a minority stake in the Russian truck manufacturer Kamaz, which makes army vehicles, and has 15% of a Cyprus-registered company called Raytar.
He also owns 3.2% of Bank Rossiya. The St Petersburg private bank has been described as Putin’s “crony bank”. The US imposed sanctions on it after Russia’s 2014 invasion of Ukraine.
These assets are only part of a series of linked financial schemes revealed in the documents that revolve round Bank Rossiya.
The bank is headed by Yuri Kovalchuk. The US alleges he is the “personal banker” for many senior Russian government officials including Putin. The Panama Papers disclose that Kovalchuk and Bank Rossiya achieved the transfer of at least $1bn to a specially created offshore entity called Sandalwood Continental.
These funds came from a series of enormous unsecured loans from the state-controlled Russian Commercial Bank (RCB) located in Cyprus and other state banks. There is no explanation in the files of why the banks agreed to extend such unorthodox credit lines.