For years there have been rumours about Vladimir Putin’s secret wealth. But a detailed picture of the hidden financial dealings of the Russian President remained elusive.
The so-called Panama Papers may disclose an even bigger network than imagined. Putin’s name does not appear in the leaked documents, but those of some of his very close friends do.
These are comrades whose history with Putin goes back decades, to Saint Petersburg, known as Leningrad before the fall of the Soviet Union.
That’s where Putin met Sergei Roldugin, who rose to fame as a cellist and conductor. He introduced Putin to his first wife, Lyudmila, and is the godfather of their daughter Maria.
Both men are described as best friends.
Another close friend whose name appears in the leaked papers, Yuri Kovalchuk, is often referred to as Putin’s personal banker. He’s at the helm of Rossiya bank, based in St. Petersburg and at the heart of the offshore financial dealings.
According to the leaked papers, this is how it works.
Rossiya bank helps create shell companies in Roldugin’s name, such as Sonnette Overseas, or International Media overseas. Seven companies in his name are registered offshore — in the tax havens of Panama, Belize and the Virgin Islands.
The shell companies are registered via a discrete law firm specialized in offshore planning, Mossack Fonseca, which later signs off loans to them.
The loans come from the Russian Commercial Bank in Cyprus, a subsidiary of the Russian state-owned bank VTB.
And the funds go into the coffers of the offshore companies. One of them, Sandalwood Continental, in the Virgin Islands, received more than $1 billion in loans between 2009 and 2012.
During that period, Sandalwood reportedly lent more than $10 million to the ski resort of Igora, near Saint Petersburg, where Putin’s daughter Katerina threw a lavish wedding party in 2013.
It’s claimed up to $2 billion have been funneled outside of Russia through President Putin’s close friends.
The Kremlin has slammed the revelations as lies attempting to destabilise the president.