Brass plate shadow banks in Dublin’s IFSC that legally funnel billions to oligarchs with links to Putin
IRISH corporate service companies have earned millions in fees from firms controlled by Russian oligarchs and others who have raised billions from Ireland’s shadow banking sector.
The Irish companies operate legally but the practice has seen vast amounts of money flow to Russian entities and individuals now on sanctions lists – including some of President Vladimir Putin’s closest associates.
Last week the Dáil heard an estimated €34bn in Russian funds are held by opaque companies in the shadow banking sector at the International Financial Services Centre (IFSC) in Dublin.
And in 2020, research by Trinity
College Professor Jim Stewart identified a staggering €118bn was funnelled from Ireland to Russia between 2005 and 2017 by IFSC firms.
Many of these companies – known as Section 110 firms – are brass plate, shell companies with no staff that effectively act as a conduit for funds sent to Moscow and elsewhere.
Despite controlling funds worth billions, these Special Purpose Vehicles (SPVs) pay little or no tax in Ireland thanks to laws passed by the Government.
A small army of Dublin-based corporate service providers, auditing firms and lawyers provide services to the sector – earning millions in the process.
One of these firms, TMF Ireland, provides Irish directors to sit on the board of VEB Finance PLC and manages the administration of the firm. VEB Finance makes money by issuing bonds to investors and lending the billions it receives to the VEB bank in Moscow.
The Irish directors of VEB Finance – Martin Carr and Kevin Butler – are employees and board members of TMF Ireland which made a profit of more than €3m on a turnover of €10m in Ireland in 2019 for providing these services to many Section 110 firms.
Arthur Cox acts as legal advisers to the Irish VEB vehicle, while Grant Thornton provided auditing services to the firm.
VEB is subject to EU sanctions and has just been excluded from the international Swift payments system because of the Ukraine invasion.
The bank’s chairman is Igor Shuvalov, who once served in the Russian government as first deputy prime minister and government chief of staff.
According to the sanctions list, he has also twice worked as an aide to Putin.
Mr Shuvalov, who owns a £11.4m (€13.7m) London flat, reportedly used a £38m (€46m) private jet to fly his wife’s Corgis to dog shows across Europe.
TMF Ireland also provides Irish directors and corporate administration services to Alfa Issuance PLC – an IFSC company that is directly controlled by Russia’s Alfa Bank, which is now subject to sanctions throughout the EU, US and the UK because of their links to Putin’s regime. Alfa Issuance sells bonds to investors through Ireland and lends the billions received to the Alfa Bank in Moscow.
Arthur Cox and Grant Thornton also provide legal and auditing services to the Irish Alfa Bank vehicle while Grant Thornton provide auditing services. Russia’s
Alfa Bank is part of the overall Alpha Group to which the Irish Government turned for help in trying to trace the hidden assets of Sean Quinn’s empire.
But it is run by Russian oligarchs who are close to President Putin. Alfa Group owners include billionaires Mikhail Fridman, Alexei Kuzmichev and German Khan, a self-confessed gun fanatic with a private collection displayed in his Moscow office. Mr Khan no longer brings weapons to meetings as he did in the heady days of the 1990s – the practice was banned in 1999 under a new Russian law.
The super-wealthy trio, who are known to enjoy an enviable relationship with the Kremlin, have also left behind an almost mythical trail of colourful business escapades and endeavours from the time they first emerged as players in the post-Soviet Russia of the 1990s.
A major shareholder of the Alfa Bank is Petr Aven who, according to the EU sanctions list is ‘one of Vladimir Putin’s closest oligarchs’.
The sanctions list reads: ‘He is one of approximately 50 wealthy Russian businessmen who regularly meet with Vladimir Putin in the Kremlin. He does not operate independently of the president’s demands.’
The sanctions list also describes Mr Aven as an ‘especially close personal friend’ of another oligarch called Igor Sechin, chief executive of Russian State oil firm Rosneft and another Putin allay whose super yacht was seized in France this week.
Rosneft is also a beneficiary of Ireland’s shadow banking sector. That’s because it is largely financed by the Credit Bank of Moscow, which used a Section 110 IFSC firm to raise funds in Ireland.
This firm – CBOM Finance plc – is facilitated by a Dublinbased service provider called Cafico International, which provides directors and brass plate office corporate services.
Consequently, the directors of CBOM Finance plc – a firm that has raised billions sent to Moscow – are simply Cafico employees acting as nominees.
They include naturalised Irish citizen, Rolando Ebuna – a senior manager with Cafico – and Jean Chook, a 25-year-old just-qualified accountant who lives in Dublin. Arthur Cox acts as legal advisers to the Irish CBOM vehicle while Grant Thornton provides auditing services.
This week we asked Cafico International, TMF Ireland, Arthur Cox and Grant Thornton what ethical considerations are taken into account before they agree to act for a client.
We also asked at what point might ethical considerations – such as sanctions – result in a decision to cease working with any particular client.
Cafico International did not respond to our questions but confirmed receipt of our queries.
On Friday night, following our query, the TMF group confirmed it had just ‘decided to exit all work for clients with Russian ownership around the world’.
A spokesman told the MoS: ‘Given the complex interplay between individuals, institutions and government in Russia, TMF Group has decided to exit all work for clients with Russian ownership around the world.’
However, the spokesman did not clarify if this meant TMF would also stop working with shadow banking firms in Ireland controlled, but not technically owned, by Russian oligarchs.
Arthur Cox also confirmed it was declining new instructions from Russian firms and ceasing ‘all Russia-related work’.
The law firm said: ‘We are appalled by the horrific scenes in Ukraine and condemn the invasion of Ukraine by Russia which has prompted a review of all existing and any new Russia-related work.’
A spokesman for Grant Thornton said the firm was ‘taking all appropriate steps in response to international sanctions as they impact any clients or suppliers’.
It added: ‘The steps taken include ongoing monitoring, terminating existing relationships and declining new relationships where appropriate.
‘We will not provide services to clients subject to sanctions or those connected to the Russian or the Belarusian governments.’