Paradise Papers reveal limited activity in Cyprus – so far

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By Stelios Orphanides

The Paradise Papers, the new data leaked from the Bermuda-based Appleby law firm, so far show that Cyprus has played only a limited role in the efforts by world politicians, celebrities, major companies and entrepreneurs to conceal their wealth or avoid paying taxes.

The latest tranche of 13.4 million documents leaked on Sunday show that Cyprus’s involvement is apparently limited to activities related to two childhood friends of Russia’s president Vladimir Putin, the Ukrainian President Petro Poroshenko, a grandson of Kazakhstan’s ruler Nursultan Nazarbayev and a former mayor of Warsaw.

According to the website of the International Consortium of Investigative Journalists (ICIJ) two billionaire brothers, Arkady and Boris Rotenberg, both old friends of Putin and included in the US sanctions list, are linked to Cyprus via Markom Management.

Markom Management, formerly known as SP Management, is a London-based company which helped the two brothers set up six companies in the British Virgin Islands (BVI), according to the ICIJ report. Markom Management acted as a liaison with the Panamanian law firm Mossack Fonseca.

Markom Management was behind the redomicile of most the companies belonging to the Rotenbergs to Cyprus by the summer of 2015, according to the ICIJ. The companies were involved in a wide range of activities which included the construction of pipelines and the purchase of equipment for constructing a villa in Tuscany for Igor Rotenberg, the son of Arkady. The Rotenbergs did not respond to request for comment, the ICIJ said.

Regarding Ukrainian president Poroshenko, the Paradise Papers say that while he had pledged to sell his confectionary group of companies, Roshen Group, during the 2015 presidential campaign, he had a company set up in Cyprus which ultimately acquired the shares, the ICIJ said. Poroshenko’s advisors said in response that the structure aimed at facilitating the sale of Roshen.

Nurali Aliyev, the former deputy mayor of Astana, Kazakhstan’s capital, appears to be the owner of d’Alba International Holdings Ltd, a BVI-based firm established more than three years ago, according to the ICIJ. Alba International used to hold a bank account in Cyprus.

Aliyev is a grandson of Kazakhstan’s president, Nursultan Nazarbayev. His mother Dariga, Nazarbayev’s eldest daughter, was married to Rakhat Aliyev, the former vice foreign minister who before he was found dead in his cell in 2015 while awaiting trial for kidnapping and murder in an Austrian prison, had amassed a huge fortune. Nurali Aliyev, did not respond to request for comment.

Finally, Warsaw’s former mayor and former member of the European Parliament Pawel Piskorski, appears to have attempted to open up a bank account with Eurobank Cyprus Ltd, for Stardale Managament Inc., a Panamanian company he acquired five years ago, the ICIJ said. Piskorski said in his response that the acquisition of Stardale was part of a plan he later abandoned and hence he did not need to open the account with Eurobank.
Appearance on the list of Paradise Papers does not indicate criminal activity.

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Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • SuzieQ

    However, it’s early days….

    • Pc

      I think you’ll find that the Isle of Man, Guernesey, the British Virgin Islands and other British territories will feature much more prominently than Cyprus.

      • Caulkhead

        I agree. Cyprus is much more likely to be involved in money laundering than tax avoidance.

  • Veritas

    It’s always the filthy rich that try to hide all or part of their fortunes to avoid the tax man.
    They don’t want to contribute to the general well-being and development of their society.
    The worst ‘offender’ in helping these vultures is Britain and its small tax heaven islands.
    Even the British Royal family, one of the biggest receiver of EU agriculture subsidies, is mentioned in this new Appleby report.

    • gentlegiant161

      This is also more about the movement of money and the interconnected web of who knows who and whose got the dirt on prominent people to manipulate them to facilitate their wishes..
      And I don’t mean Bono buying a supermarket in Lithuania via a firm in Malta to get a tax break.
      EU law on offshore tax and shell companies comes into force in 2019 – about the time UK leaves the EU…coincidence?
      Watched Lord Shawcroft being chased around by a reporter last night refusing to be questioned.

    • Marius-K

      People need to get more involved into the public expenditure and programs.

      They need to reenactment the ability to vote on legislation or amendments to laws, like they used to have in the past.

      They removed this ability and implemented the voting power on your elected representative, however we have far better technologies and accessibility to people is more capable of delivering immediate voting and polling. As they had in the past using postage male and paper.

      If you want better, you have to be proactive with your government and push for more participation.

  • Marius-K

    Governments also over step their validity of taxation; they will use the media and public opinion as a warrant to collect more money. Merciless way. They don’t care if your business has a loss, they will force it on you within months, they will even take the food from your family. They don’t care if you starve to death.

    The reality is that most of these places are legal, and the majority of these companies or individuals are probably following the rules.

    Imagine, your a young entrepreneur and you take off of this risk and expenditure for a small chance of success. Well, you did become successful, and the only way to keep your employees fed is to keep growing business, meaning overseas. The only option to do it legally is to use a foreign corporation which you go to international lawyers do help you do it legally. Not to jeopardise your business. (Which you probably risk all wealth you own and build and then some more to have) and to get started by having an offshore holding company (which is registered to your domestic government) and then you run your overseas company through your holding company. (Which you were advised as the best way because legal systems, treaties and so on in place.). Then you wake up a year later to find your name is on these “paradise Papers” as having been evading taxes and potentially associated to international crime. Which is totally not true, you realistically pay almost 50 percent of your money to taxes and your business is only successful because your expanded overseas but now your being investigated which will probably end up destroying your reputation and business.

    This is cohesion and defamation of character to the (probably majority) of these companies listed as money laundered.

    The media is not shielding from being sued for defamation of character nor is shielded from legal proceedings and inquires for using your in a narrative of criminal activity. (Especially when they see your name looks southern European or taking foreign.)

    I feel sorry for those companies that probably were following rules, (probably 90 percent of them) for some low iq looser to try to claim it’s fraud and release confidential information like that.

    • Gipsy Eyes

      Companies pay taxes on profits not losses. The more I earned the more tax I paid. Why should this rule not apply to entrepreneurs? This is also about individuals such as Lewis Hamilton dodging VAT on a private jet and actors who syphon off their salaries into off shore accounts which then make them interest free loans to live off. Stop making excuses for these criminals!

  • disqus_ZPlOdQqScB

    Might not be illegal!! Morally? But who cares right!