Rosneft caught playing the three-card marney dealer with tax authorities

by William Hughes

The company was seeking a 1.5bn rubles tax refund (€21 million) for a luxury apartment in the middle of Moscow bought in 2013 from Rosneft. That was a mistake because Federal Authorities investigated the claim.

Now you see it

But, there was a problem.

The Court believes the transaction was fictional, and Zaeliko-Real Estate bought the building to collect the tax rebate.

Now you don't

The apartment is leased today by an "independent" oil and gas company called Oktrytie.

But, Russian Federal Tax authorities presented evidence that links Rosneft and Oktrytie. The common denominator is the former President of Rosneft, Eduard Khudainatov, who owns Okrtytie. That company has received suspicious VAT rebates in the past.

During the course of the trial, it transpired that Zaeliko-Real estate was created only thirteen days before the transaction.

The director of the company was previously unemployed, and its founder is Cypriot citizen and the proud owner of 24 more similar companies. He has never been to Russia or seen the property in question.

To buy the apartment, Zaeliko-Real Estate borrowed $350 million, which was borrowed from another company, Elyomo Enterprises. Elyomo is now insolvent.  

Whose dealing

To summarize: the former President sells an asset, which he buys through a fictitious company, on money he fictitiously borrows from another, and later leases the apartment to yet another, which he owns.

The court concluded the buying and selling companies are interdependent, and "belong to the same group of oil industry companies," the court decided.

The question now is who was trying to transfer money from one pocket (state) to another. Was the Eduard Khudainatov or Rosneft.