How The Elite Hide Their Wealth

Russian billionaire’s Namibian land purchases linked to offshore company

The Panama Papers have linked Russian billionaire and Namibian land baron Rashid Sardov to a number of unscrupulous offshore companies, writes Shinovene Immanuel

Russian billionaire Rashid Sardarov, who owns large tracts of land in Namibia, is a long-term client of Mossack Fonseca, the law firm at the centre of the Panama Papers data leak, which was obtained by German newspaper Süddeutsche Zeitung and the International Consortium of Investigative Journalists.

Absentee landlord Sardarov is a 60-year-old flamboyant Russian oligarch with an interest in energy businesses, property, aviation, hospitality and wildlife hunting.

In 2013 he bought several farms in Namibia, measuring 28,000 hectares (the equivalent of about 34,000 football fields), through his Switzerland-based company, Comsar Properties SA. Sardarov also apparently intends to build a game ranch 70 km outside the Namibia’s capital city of Windhoek.

Mossack Fonseca specialises in creating offshore shell companies for the world’s richest and most powerful people, and Sardarov is one of Mossack Fonseca’s oldest clients, having bought Primavera Trading SA through them in 2000.

The company was formed in March 1999 by two fronting directors. Despite Primavera not being directly listed as the owner of the land in Namibia, leaked documents from Mossack Fonseca indicate that it was set up to carry on the business of an investment company and to: “buy, own, hold, lease, sell, rent and develop land and buildings and real estate in all its branches, and to make advances upon the security of land or houses or other property or any interest”.

In December 2013, 50% of Primavera’s shares were issued to the Solidarity Alliance Foundation, which is wholly owned by Sardarov. He directly retained his shares in December 2015.

Read the full response from Mossack Fonseca here

During that period, Sardarov made several transactions, such as an interest-free loan to a Panama-based company called Tigron Corporation, through Swiss banking giant UBS, a bank which in 2009 admitted to aiding the rich in avoiding paying taxes.

Solidarity Alliance Foundation has been linked to over 60 offshore companies.

In 2015, officials representing Sardarov enquired about creating a vistra trust.

According to tax watchdog Tax Justice, vistra trusts allow the real owner of an offshore trust to have their cake and eat it, by legally separating themselves from the assets (thus shielding them from related taxes and scrutiny), but still exerting significant control.

Dummy Directors

Primavera Trading SA has a history of using front directors. On 20 May 2015, Primavera’s real owners Sardar Sardarov and Rashid Sardarov wrote a letter to Mossack Fonseca, asking the law firm to provide them with dummy company directors named José Jaime Melendez and Lizet Moreno.

The two, who previously also served as directors of Primavera Trading, are known to be serial directors of offshore firms, having fronted for high-profile clients across the globe.

Arab Reporters for Investigative Journalism reported last year that Melendez manages more than 700 other offshore companies belonging to rich and influential people around the world, while Moreno manages around 16 companies registered in Panama on behalf of others.

The two are involved in a firm linked to a wealthy family that is connected to Syrian president Bashar al-Assad.

The Sardarovs wanted the dummy directors to sign a US tax status declaration to be submitted to Belgium bank ING.

“We, therefore, hereby declare that we will completely indemnify Mossack Fonseca or any other person commissioned by them against all and any consequences, lawsuits and/or damages which may arise in connection with any actions relating to the signature of the above-mentioned document,” the Sardarovs wrote.

One of the main purposes of creating an offshore company is to hide the names of the real owners. Even though creating these kinds of companies is not illegal, the Panama Papers once again showed that some of these shell companies, masked in secrecy, provide cover for dictators, politicians and tax evaders.

Namibian politicians have over the years tried to pass legislation to restrict foreign ownership of land, a commodity that has become one of the most expensive assets to acquire in a country of just over 2.4 million people.

Sardarov chairs two large private firms in Russia and in Eastern Europe, Comsar Energy Group and the South-Ural Industrial Company.

The Centre for Investigative Reporting in Sarajevo reported that Sardarov earned his first millions in Orenburg, a Russian region which borders Kazakhstan.

According to that report, he received a concession for mining a natural gas condensate that can be processed into drip gas to power vehicles, benzine and light distillate.

Sardarov used the refinery of Russia’s state-owned Gazprom until he built his own refinery when he established South Ural Industrial Company in Moscow in 2003, which now has assets worth $2.2 billion.

He is unapologetic about his riches, and was quoted by the Centre for Investigative Reporting in Sarajevo as saying: “I’ve been a billionaire for years, and I’m not ashamed to say so”. He received Bosnian citizenship in 2011 because he was a major investor there.

The Wildlife Ranch

In addition to his 2013 land purchases in Namibia, at the end of 2014, Sardarov wanted to buy an additional 18,000 hectares of land for expansion. It is not yet clear whether Sardarov acquired the extra land he wanted. But he is building a state-of-the-art game ranch, Marula Game Lodge, in the region.

A 2014 environmental impact assessment report seen by The Namibian said the Russian billionaire visited Namibia in 2006 on one of his many hunting trips to Africa.

According to the environmental report, Sardarov owns the Namibian game ranch through Switzerland-based Comsar Properties SA, which in turn owns Marula Game Ranch Pty Limited together with Namibian partners, the Popa Group. It’s not clear whether the Namibian partners still own their shares in the company.

That report also investigated the consequences of the Marula Game Lodge, including the safety of the wildlife in the area as well as the potential impact on the local communities and environment.

By 2014 there were over 7,000 wild animals on the ranch which Sardarov bought for N$72 million, and the area will keep around 15,000 animals once completed. The total investment by the Russian billionaire would be over N$700 million, claims the report.

“The idea of establishing the Marula Game Ranch and proposed lodge arose out of Mr Rashid Sardarov’s passion and love for nature and wildlife, particularly the pristine ecosystem of Namibia,” the environmental report said.

Sardarov claims that he wants to use the ranch to tap into Eastern European, Middle Eastern and Asian tourists markets.

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