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New Panama leaks show offshore firm linked to associate of Ukraine's Poroshenko

Published 05/10/2016, 03:28 PM
Updated 05/10/2016, 03:30 PM
© Reuters. Ukrainian President Petro Poroshenko attends a press briefing with Japanese Prime Minister Shinzo Abe in Tokyo

By Natalia Zinets

KIEV (Reuters) - A deputy director of Ukrainian President Petro Poroshenko's confectionery empire is a beneficiary of a company registered in the British Virgin Islands (BVI), according to new information from the leaked "Panama Papers".

The link to Sergei Zaitsev is potentially embarrassing for Poroshenko because he said in April he wanted to pass a law requiring Ukrainians to disclose all their offshore holdings in an attempt to force them to pay tax in their home country.

Serhiy Leshchenko, a prominent lawmaker in Poroshenko's faction, told Reuters on Tuesday that a special investigative commission should be set up to probe Poroshenko's business dealings as a result of the latest allegations.

A spokeswoman for Roshen, Poroshenko's confectionery business, declined to comment. She also said Zaitsev was absent and could not comment.

According to a database of documents from the Panama Papers made public on Monday by the International Consortium of Investigative Journalists (ICIJ), Zaitsev is a beneficiary of Intraco Management Ltd, registered in the British-ruled tax haven.

Interfax-Ukraine news agency quoted Zaitsev as saying on Tuesday that he was associated with Intraco, and that its main activity was arranging and servicing charter flights.

The address given for Zaitsev in the database is identical to the business address of at least three other companies owned by Poroshenko, according to the Ukrainian state registry.

Poroshenko, one of Ukraine's richest businessmen, was propelled to power by a popular revolt in 2014, and needs to convince Kiev's Western backers that he is serious about improving governance and rooting out entrenched corruption to secure continued financial backing.

Poroshenko's press service told Reuters via email on Tuesday that the president had no connection to Intraco.

"We can state that Petro Poroshenko has no relation to the company mentioned by you, and therefore he didn't receive any financial benefits from it," it said.

"The owner of the company Intraco is Sergei Zaitsev. It's his business - as he said in a public statement," the service said, referring to Zaitsev's comments in the Interfax-Ukraine report.

BLIND TRUST

The ICIJ alleged in April that Poroshenko had set up an offshore firm, Prime Asset Partners, to avoid tax in August 2014 during a peak in fighting between Kiev's forces and pro-Russian separatists in eastern Ukraine.

Poroshenko denied wrongdoing. He said the offshore company had been set up to help him move his business assets to a blind trust. While campaigning for office, Poroshenko had promised to sell his business assets.

In the database, Zaitsev is named as "Sergev Zuitstv". Dmytro Gnap, who is a journalist affiliated to the ICIJ and has seen the original company documents, told Reuters by phone on Tuesday that this was a transcription error by the database administrator, and that the original documents showed the beneficiary as "Sergei Zaitsev".

The "Panama Papers" comprise four decades of documents from Mossack Fonseca, a Panamanian law firm that specialises in setting up offshore companies.

Intraco has already featured in allegations about Poroshenko's circle.

Last year, the former head of Ukraine's security service, Valentyn Nalyvaichenko, accused Ihor Kononenko, a close ally of the Ukrainian president, of using the BVI-registered firm to launder money.

Nalyvaichenko made the allegations in parliament last year in Kononenko's presence, and has repeated them several times since.

According to statements of money transfers involving Intraco, copies of which have been seen by Reuters, the firm made rental payments on a property on behalf of Kononenko's daughter.

Kononenko has denied wrongdoing or any association with Intraco, and cast doubt on the authenticity of the documents presented by Nalyvaichenko.

In an interview with Reuters on Tuesday, Kononenko said he had met Zaitsev from time to time, but had no current business dealings with him.

Kononenko said he had paid for his daughter's schooling and accommodation in Switzerland out of his own pocket and not via any company, including Intraco.

"I have no connections to this company, and I do not know whether this company exists or not, or what it does if it exists," Kononenko said.

© Reuters. Ukrainian President Petro Poroshenko attends a press briefing with Japanese Prime Minister Shinzo Abe in Tokyo

(Removes reference to "second" firm in headline.)

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