At least 12 oligarchs, including oligarchs subject to EU sanctions Mikhail Fridman and Alexei Mordashov, are among those listed as beneficial owners of Luxembourg companies, together making up around one-third of Forbes’ 2021 list of the top 40 Russian billionaires by wealth and assets.
Based on the Forbes’ 2021 annual assessment of the top 40 Russian billionaires, the combined global assets of these 12 oligarchs with assets in Luxembourg would be $140 billion out of a total of $260 billion.
“Business with a link to Russia help to finance the war,” a source close to the database, called Stop Russian Capital, told Delano. “So it’s critical now for the moment to freeze assets of these companies to disable transfer of money to Russia.”
Moreover, it is important for those working with these companies to be vigilant. “Executives and consultants must be vigilant and ensure that through their professional activity they don’t help to support the war,” said the source.
However, verifying ultimate beneficial owners of entities in Luxembourg has not been a straightforward process. In 2015, the European Union’s Fifth Anti Money-Laundering Directive pushed for central disclosure in registrations of companies, trusts and similar legal arrangements in European jurisdictions. The result in Luxembourg was public Ultimate Beneficial Owner register, established in 2019 and intended to be completely open and accessible to the general public.
However, the register has come under criticism for being searchable only by company and not by beneficial owner--making it difficult for the public and journalists to determine ownership.
The threshold for disclosing beneficial ownership in Luxembourg is also set to 25%. “This is a relatively high threshold, because if you look at Nigeria, for instance, the threshold is 10%. Therefore, there could be significant beneficial owners in Luxembourg who own 24.9% of an entity but don’t disclose,” Thom Townsend, executive director of international not-for-profit Open Ownership told Delano.
In the case of the analysis done by the big 4 alumni, they used a variety of sources. “We used the latest Forbes list of wealthiest Russian oligarchs, finding publicly available financial statements on their website about their business groups. And then for companies which were disclosed in those financial statements, we found information in ,” the source told Delano.
The oligarchs with beneficial ownership of companies in Luxembourg are: Alexei Mordashov, Alisher Usmanov, Andrey Skoch, Andrey Melnichenko, German Khan, Mikhail Fridman, Alexei Kuzmichev, Pyotr Aven, Roman Abramovich, Viatscheslav Kantor, Viktor Vekselberg and Vladimir Yevtushenkov.
Delano has asked all 12 for comment.
The Luxembourg entities with these oligarchs as beneficial owners are: Steel Capital SA, MegaFon Luxembourg S. a. r. l., Alfa Capital Investments Holdings, Alfa Asset Management (Europe) S.A., ABH Holdings S.A., L1 PET Holdings S. a. r. l., L1T VIP Holdings S. a. r. l., L1 New Energy S. a. r. l., Letterone Office Services S. a. r. l., Letterone Technology Growth S. a. r. l., L1 Energy Investments S.C.Sp, L1PET S. a. r. l., L1 PET Management S.C.Sp, L1 PET Co-Invest S.C.Sp, L1 PET Splitter S.C.Sp, L1 Health Master Holdings S.C.Sp, L1 Health Master Carry S.C.Sp, L1 Andromeda Co-Invest S.C.Sp, L1 PET Intermediate Holdings S.C.Sp, L1R Holding S. a. r. l., Letterone Core Investments S. a. r. l., L1 Investments S. a. r. l., Letterone Investment Holdings S.A., ABH Holdings S.A., Letterone Holdings S.A., Letterone Corporate Partner S. a. r. l., Letterone Treasury Services S.A., L1 Retail Portfolio S.C.Sp, L1 Health Holdings S.C.Sp, L1 Retail Carry S.C.Sp, L1 Health Portfolio S.C.Sp, L1 Health Group S. a. r. l., L1 New Energy S. a. r. l., L1 Health GP S. a. r. l., L1 Health Portfolio Carry S.C.Sp, L1 Energy Intermediate Holdings S.C.Sp, L1 Technology Headco S. a. r. l., L1 PET (Germany) S. a. r. l.,, L1 PET Holdings S. a. r. l., L1 Energy Capital (USA) S. a. r. l., L1 Energy Holdings GP S. a. r. l., L1 Energy Capital Management S. a. r. l., L1 Energy Sub-Holdings S. a. r. l., L1 Health Portfolio GP S. a. r. l., L1 New Energy HeadCo S. a. r. l., L1 New Energy GrowthCo S. a. r. l., L1 Health Portfolio Co-Invest S.C.Sp, L1 Technology Fibre Holdings S. a. r. l., L1T FP Holdings S. a. r. l., LIHS Corporate Partner S. a. r. l., Veon Luxembourg Holdings S. a. r. l., Veon Luxembourg Finance Holdings S. a. r. l., Veon Luxembourg Finance S.A., Evraz Group S. A., Redbrick Investments S. a. r. l., MK Holdings S. a. r. l., RBI Industrials S. a. r. l., Redbrich Holding S. a. r. l., MMK Mining Asset Management S. A., Oerlikon Balzers Coating Luxembourg S. a. r. l., Stentex Holding, Sistema Finance S. A., SCP Group Holdings S. A., SCP Group S. a. r. l., Sistema Finance Holding S. A., SCP Group Advisory S. a. r. l.,, Rusnano Sistema Investments S. a. r. l., SCP Retail Investments S. A., Fonds Rusnano Capital S. A., SCP II Holdco S. A., Rusnano S.A. and East-West United Bank S.A.
Letterone provided the following statement to Delano:
“Mikhail Fridman and Petr Aven’s shareholdings are frozen indefinitely and they cannot receive dividends or any other financial benefit from LetterOne.
Today we announce further steps. German Khan, Alexey Kuzmichev and Andrei Kosogov have resigned from all positions at LetterOne, including the board. None of these three individuals has been sanctioned, but they believe that this is the right thing to do in the long-term interests of LetterOne its employees and the many jobs it supports in its portfolio companies.
In addition, the board have decided to make a substantial donation of $150 million to support the urgent work underway to help those affected by the war in Ukraine. We know that everyone at LetterOne, including our founders, support this action. LetterOne’s shareholders have also agreed that all dividends from LetterOne will be paid to ongoing relief efforts for the foreseeable future.”
Mervyn Davies, chairman of Letterone said:
“The new board and I will focus on protecting the enormous economic and social contribution LetterOne makes. I am also determined to ensure that the 120,000 jobs throughout the UK US and Europe are protected. We know that everyone involved in L1, including our founders, would want us to take these steps given their love and passion for and heritage in Ukraine.“
German Khan said:
“The majority of LetterOne founders have deep roots in Ukraine and the destruction of the cities where I spent my childhood and which are home to the graves of our ancestors is heartbreaking. The recent bombing of the Babyn Yar holocaust memorial centre, which we funded and helped create feels inconceivable.
My partners and I stand for the earliest end to war and will do all we can to help those affected – whether employees of our businesses in Ukraine, or victims of the violence. We fully support the board’s actions in this matter.”
Article corrected on 10 March 2022 to remove Sodrugestvo Nordic S. a. r. l., Sodrugestvo Participations S. a. r. l., Sodrugestvo Group S. A., Soft Commodity Port Company S. a. r. l., European Commodity Company S.A., Intergrain S.A., Sodrugestvo Regions S. a. r. l., MedAgro S.A., Agri Line S. a. r. l., United Group S.A., United Pilsen S.A., VIY Managers, VIY Investment Solutions, VIY Investments Holding, VIY Capital Partners S.A., which have no connection to the 12 oligarchs listed.