Skip to comments.How the UK helped Viktor Yanukovych loot Ukraine
Posted on 03/11/2014 6:54:15 PM PDT by managusta
THE sight of Ukraines corrupt leadership taking to the skies in private jets has finally focused attention on how the oligarchy led by former president Viktor Yanukovych looted the country for so long, necessitating the bail-out that Europes taxpayers will be asked to pay for. Before complaining too loudly, though, we might ask how our own leaders allowed it to happen.
The Eye first reported the staggering scale of corruption routed through UK limited liability partnerships (LLPs) in 2012, documenting the millions flowing out of Ukraine, usually via Latvian and Austrian banks.
These corporate vehicles were created by the last government as a sop to accountants who were scared of being sued for dodgy audits post-Enron, and their ownership can be easily concealed behind offshore shell companies. As the last Eye reported, several thousand are owned from Belize and the Marshall Islands and other tax havens sorry, centres of corporate excellence. The LLPs garner the respectability of British incorporation, at the same time filing patently false accounts at Companies House with impunity.
Cardiff kitchen shop The method of choice for Yanukovych and acolytes to plunder their country was via corrupt contracts (a central role was reportedly played by Ukraines richest oligarch and close Yanukovych confidant Rinat Akhmetov). They often used LLPs such as Highways Investment Processing LLP, which in 2011 won a Ukrainian government contract for a $400m oil rig when the going rate was at least $100m cheaper (Eye 1326).
The LLP in question, the Eye discovered, was based at a disused kitchen shop in Cardiff, while the man running the company-formations business responsible for it (and at least 750 more LLPs owned by offshore shell companies) had no idea who was behind the network of shell operations paying him handsomely.
Other LLPs in the same network were documented in an Eye 1340 special report Where Theres Muck, Theres Brass Plates in May last year, showing the tens of millions of pounds transferred in their names while they filed accounts in the UK showing no activity.
Web of corruption Last month Russias Novaya Gazeta newspaper identified other LLPs behind corrupt Ukrainian public contracts. One, Darton Management LLP, set up a company that cornered the substantial Ukrainian wheat market with the help of an agriculture minister close to Yanukovych. This LLP is owned by two Seychelles companies, Intrahold AG and Monohold AG first identified by Eye 1326 last year that are also behind further LLPs, Fineroad LLP and Roadfield Capital LLP, that control companies owning properties in the Crimea for members of the Yanukovych family (see Eye 1354).
This web of corruption stretches well beyond Ukraines borders. The same, originally Irish firm behind the shells in the first place, International Overseas Services, created the vehicles (including half a dozen LLPs) that laundered the proceeds of the Russian tax fraud behind the murder of whistleblowing lawyer Sergei Magnitsky in 2009 (Eyes passim).
The consequences of facilitating corruption should now be clear to lawmakers, including Britains, since clearing up the mess will prove far more expensive financially and politically than dealing with the causes. Promises of registers to disclose the beneficial ownership of companies, and presumably LLPs, may not be enough. Without policing the lawless company-incorporation business, for which there are no real plans, tomorrows Yanukovyches will still find a useful corporate haven in supposedly respectable Britain.
Don't kid yourself. Its going on here too at an ever increasing rate. Only the names are different.
Does Putin have any of his own money?
bump for later.
The widely forecast world wide financial bubble bursting event can be laid at the feet of the same corrupt idiots who caused similar events, centuries ago.
When corruption is enshrined in governments, they eventually get violently overthrown.
The EU and it's allied enemies have been reheating this toxic concoction for decades.
This time, I say we Yanks sit it out, and let them all utterly destroy themselves!
Barclay’s keeps Robert Mugabe afloat. I guess international money laundering is easier than ruling the world with a powerful navy.
Hold your horses tonto! This is British (amongst others) companies that are doing the money laundering, not the UK itself. Also, this is a report from a British newspaper (doing genuine investigative journalism amazingly enough). The countries you really need to be worried about are the ones where corruption is never exposed.
That bears repeating over and over again, because it seems to be something that eludes most citizens.
Well, Kemosabe, it looks like both our countries need to tighten their banking laws and worry about the big international criminals instead of screwing small depositors.
Too damn right we do.