Ukraine junta leaders enjoy Extreme Wealth living in Europe

Ukrainian President Volodymyr Zelensky rode to power on pledges to clean up the Eastern European country, but the Pandora Papers reveal he and his close circle were the beneficiaries of a network of offshore companies, including some that owned expensive London property.

Actor Volodymyr Zelensky stormed to the Ukrainian presidency in 2019 on a wave of public anger against the country’s political class, including previous leaders who used secret companies to stash their wealth overseas.

Now, leaked documents prove that Zelensky and his inner circle have had their own network of offshore companies. Two belonging to the president’s partners were used to buy expensive property in London.

The revelations come from documents in the Pandora Papers, millions of files from 14 offshore service providers leaked to the International Consortium of Investigative Journalists and shared with partners around the world including OCCRP.

The documents show that Zelensky and his partners in a television production company, Kvartal 95, set up a network of offshore firms dating back to at least 2012, the year the company began making regular content for TV stations owned by Ihor Kolomoisky.

Ihor Kolomoisky is an oligarch dogged by allegations of multi-billion-dollar fraud. The off-shore companies were also used by Zelensky associates to purchase and own three prime properties in the center of London.

The documents also show that just before he was elected, he gifted his stake in a key offshore company, the British Virgin Islands-registered Maltex Multicapital Corp., to his business partner — soon to be his top presidential aide.

And in spite of giving up his shares, the documents show that an arrangement was soon made that would allow the offshore to keep paying dividends to a company that now belongs to his wife.

A comedian and actor who had been famous since the 2000’s, Zelensky began his political rise a few years after taking on a starring role in the political satire “Servant of the People,” which began airing on the oligarch’s network in 2015.

The show starred Zelensky as a humble history teacher whose anti-corruption rant in class is filmed by a student, goes viral online, and wins him national office.

In a case of life imitating art, Zelensky ended up winning the real-world Ukrainian presidency just three-and-a-half years after the show’s launch, with more than 73% of the vote.

Zelensky capitalized on widespread public anger at corruption, but his 2019 campaign was dogged by doubts over his anti-graft bona fides, given that his campaign was boosted by media belonging to Kolomoisky — who is accused of stealing US$5.5 billion from his own bank and funneling it offshore in concert with his partner, Hennadiy Boholiubov.

In the heat of the campaign, a political ally of incumbent President Petro Poroshenko published a chart on Facebook purporting to show that Zelensky and his television production partners were beneficiaries of a web of offshore firms that allegedly received $41 million in funds from Kolomoisky’s Privatbank.

That ally, Volodymyr Ariev, didn’t provide evidence, and his accusations have never been proven. But the Pandora Papers show that at least some of the details in this alleged scheme correspond to reality.

The leaked documents show information on 10 companies in the network that match structures detailed in Ariev’s chart.

The new documents show that part of the network was managed with help from Fidelity Corporate Services, an offshore consultancy that was one of 14 firms whose documents make up part of the Pandora Papers leak.

The documents show that Zelensky and his partners used companies based in the British Virgin Islands (BVI), Belize, and Cyprus.

It is unclear what most of the offshore network was used for, but a partial answer to the mystery can be found on London’s Baker Street, near the residence of another famous fictional character: Sherlock Holmes.

Pandora Papers documents show a network company was used to purchase an apartment in London just a short walk from the museum that now stands at 221b Baker Street, the address of Sir Arthur Conan Doyle’s legendary detective.

The area is one of several pricey parts of London favored by foreign investors using anonymous shell companies.

That apartment, a three-bedroom flat on Glentworth Street, was bought for 1.58 million pounds ($2.28 million) in 2016 by a Belize company owned by Shefir, SHSN Limited.

A two-bedroom flat nearby in Baker Street’s Chalfont Court building, which was bought by Shefir for 2.2 million pounds (US$3.5 million) in 2014, was also transferred to SHSN Limited in 2018.

The documents also show that another Kvartal 95 shareholder, Andrii Iakovlev, obtained a roughly 1.5-million-pound ($2.3 million) apartment in the Westminster Palace Gardens building, a short walk from the Houses of Parliament, in 2015 after his BVI company purchased another BVI company that owned the property.

There is no sign that Zelensky himself was a part of the London property deals. However, the documents show that he was a key player in other parts of the offshore network.

At the center of the web of foreign firms is Maltex Multicapital Corp, which has never before been linked to Zelensky.

By 2017, Maltex was divided equally between shell companies belonging to Zelensky, Iakovlev, and brothers Serhiy Shefir and Borys Shefir. Ivan Bakanov, another Kvartal 95 partner who now serves as Ukraine’s secret police chief, was the beneficiary of another company that acted as nominee and trustee for the four other men’s ownership of Maltex.

Zelensky, together with his wife, owned a quarter of Maltex through a Belize-registered firm called Film Heritage. But in 2019, in the heat of Zelensky’s election campaign, Film Heritage transferred its ownership of Maltex to another company owned by Serhiy Shefir, the soon-to-be presidential chief assistant. The transfer documents were prepared by Iurii Azarov.

The deal provided Zelensky with a measure of distance from the offshore network, while costing him nothing. The share certificate demonstrates that no money was paid by the receiving party.

Therefore the ownership was merely transferred from one name to another, said Martin Woods, a financial crime consultant who reviewed the documents for OCCRP.

The documents in the Pandora Papers also contain details that dovetail with broader allegations of offshore machinations leveled against Zelensky and his partners during the 2019 election.

During the campaign, the pro-Poroshenko member of parliament Ariev claimed that Zelensky and his partners were the beneficiaries of an offshore network of companies that received $41 million in payments that originated from Privatbank, the Ukrainian financial institution that the oligarch Kolomoisky is alleged to have looted.

Even as Zelensky pushes his anti-oligarch campaign, some continue to doubt his sincerity.

Among them is Ruslan Ryaboshapka, who was picked by Zelensky as the country’s top prosecutor in 2019, but ousted from the role in early 2020. He told OCCRP he believes this was due to pressure from the oligarch Kolomoisky.

A president shouldn’t own offshore companies. In general offshore companies are bad, whether they’re owned by a president or not.

He called moving money offshore an old tradition in Ukraine, because the country was perceived as a dangerous place with no rule of law. But still, the use of such companies today raises red flags of tax evasion or the legalization of dirty money.

OCCRP / ABC Flash Point News 2023.