The Abramovich Investment Vehicle, one of the world’s most powerful and private investment vehicles, recently announced a shift in control after Russia invaded Ukraine.
LONDON— According to securities filings, control of an investment vehicle long linked to oligarch Roman Abramovich and used to hold stakes in renewable energy and tech startups in the United States, the United Kingdom, and Israel was transferred to one of his business associates just hours after Russia invaded Ukraine.
Mr. Abramovich controls the British Virgin Islands-listed Norma Investments Ltd., according to corporate reports over the years. According to securities documents in the United Kingdom, David Davidovich, a close business partner of Mr. Abramovich, gained full control of the corporation on Feb. 24, the day Russian soldiers struck Ukraine.
Since then, the U.K. has made significant progress. Mr. Abramovich has been sanctioned by the EU, which accuses him of benefitting from Russian President Vladimir Putin’s dictatorship. The European Union followed likewise on Tuesday. Mr. Abramovich faces asset freezes and travel restrictions in the United Kingdom as a result of the measures. and the European Union.
Mr. Davidovich gained control of the organization, according to a source close to him. This source said that Mr. Davidovich’s investment in Norma “is part of his broader investments and interest in the startup industry.” Mr. Abramovich was not Norma’s former owner, according to this source, who did not disclose who it was. Norma has been connected to Mr. Abramovich in a number of public documents. For example, in its annual report submitted with the Securities and Exchange Commission in 2021, a U.S. biotech business financed by Norma said that Norma was owned by Mr. Abramovich. Mr. Abramovich was named as an indirect investor in the firm “via Norma Investments Limited” in a corporate filing to the London Stock Exchange in 2020 from AFC Energy PLC, a British fuel-cell startup.
Roman Abramovich is selling a house in London’s Kensington area.
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According to court documents, the two men routinely invest in businesses together. In certain documents, Mr. Davidovich is named as the CEO of Millhouse LLC, a Moscow-based investment business founded by Mr. Abramovich two decades ago.
The change in control of Norma comes as part of a larger effort by the Russian billionaire to sell or move assets in recent weeks, after Western governments threatened to dismantle an empire Mr. Abramovich built up since the 1990s due to what they say are ties to Russian President Vladimir Putin and the Ukraine conflict. In order to put pressure on the Kremlin, London, Brussels, and Washington have all vowed to crack down on a group of rich Russian oligarchs, including Mr. Abramovich.
Selling assets to colleagues or transferring ownership to family members, according to sanctions attorneys, may be a strategy to avoid asset freezes, at least temporarily, and maintain indirect control of assets without officially falling foul of sanctions. Many of Mr. Abramovich’s firms are registered in the British Virgin Islands, which is a British overseas territory. Mr. Davidovich has been cleared of any wrongdoing. According to documents filed in the United Kingdom, he mostly lives in Israel.
Mr. Abramovich attempted to sell his 15-bedroom house in London and his soccer team Chelsea FC before being sanctioned in the United Kingdom. According to The Wall Street Journal, he has also attempted to sell out of US-based funds. According to ship-tracking services, two of his megayachts recently left ports that might be within EU jurisdiction.
In 2012, Roman Abramovich celebrated with Chelsea FC players.
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The complicated ownership structure of Norma Investments exemplifies the difficulty that regulators in the United Kingdom, the United States, and Europe encounter in determining what assets sanctioned oligarchs hold. Officials in the United Kingdom claim that once sanctions are in place, assets held by sanctioned people are frozen. The European Union, the United States, and the United Kingdom have began penalizing oligarchs’ family members, in part to track down transactions that may have occurred prior.
Norma Investments had previously been used to make venture capital investments. According to MHC’s records, Norma has controlled MHC Services Ltd., a management consultancy based at Chelsea FC’s premises, since 2018. According to financial documents, Norma made investments in renewable-energy firms in the United States and bought a share in Velocys PLC, a British energy company. Norma also sponsored cancer and anti-aging medicine research by Cleveland BioLabs Inc., a U.S. biotech business owned by Mr. Abramovich, according to a 2021 securities filing.
Mr. Abramovich purchased a share in Shellanoo Group, an Israeli tech firm in which he invested in 2015, via a business controlled by Norma, according to a 2016 filing. A Corp-Trustee Ltd., the trustee of a Cyprus trust named Harmony Trust Settlement, was listed as Norma’s owner. Mr. Abramovich is the chain’s owner, according to the report. According to property records, Mr. Abramovich’s London house is likewise owned by a Corp-Trustee.
Many governments have the authority to temporarily freeze the assets of persons or businesses within their jurisdiction without having to prove wrongdoing via penalties or other means. Until penalties are removed or successfully challenged, owners are usually prohibited from selling or benefitting from them. Governments can’t usually take possession of assets unless they go through extensive judicial processes that need evidence of criminal activity. The British government, on the other hand, is exploring legislation that would give it the authority to take sanctioned assets.
Mr. Abramovich benefitted from Mr. Putin’s rule, according to the UK government, which sanctioned him. He was formerly a regular visitor to London, but he hasn’t been seen here in a long time. In a recent company filing, he identified his address as Russia.
When Russian President Vladimir Putin was a regional governor in 2005, he met Roman Abramovich.
Photographer for Reuters/REUTERS
According to flight records, Mr. Abramovich’s private plane has been zigzagging between Israel, where he also holds citizenship, Turkey, and Russia in recent days. On Monday, a disguised Mr. Abramovich was spotted at an Israeli airport’s VIP lounge. Mr. Abramovich’s representatives have not responded to the penalties.
According to the vessel-tracking website FleetMon, Mr. Abramovich’s 533-foot superyacht Eclipse was travelling near the Algerian coast in the Mediterranean on Tuesday afternoon after departing Philipsburg in the Dutch Antilles in the Caribbean. The islands are a part of the Netherlands, which is a member of the European Union.
The 460-foot yacht owned by Mr. Abramovich According to FleetMon, my Solaris was cruising in the Eastern Mediterranean after leaving Barcelona and stopped short in Tivat, Montenegro. Spain is a member of the European Union. Montenegro is not, although it has said that it will abide with EU penalties. Several more superyachts owned by sanctioned oligarchs have been seized or held in French and Italian ports.
Mr. Abramovich placed his Chelsea soccer club up for sale shortly after the Russian invasion. The first offers are due on Friday, but penalties in the United Kingdom prevent him from profiting from the sale. While its owner is facing penalties, the UK government has given the club a license to function regularly with certain limitations. Mr. Abramovich is also barred from selling any of his British properties.
On Saturday, the oligarch’s My Solaris yacht was seen near Montenegro.
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This article was co-written by Benoit Faucon.
Max Colchester and Margot Patrick may be reached at [email protected] and [email protected], respectively.
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