London’s upscale residential complex in Knightsbridge is a shady place, according to an investigation by the Washington, D.C.-based International Consortium of Investigative Journalists.
Most of the 72 hyper-luxury apartments at One Hyde Park, where Ukraine’s mega-billionaire Rinat Akhmetov has keys to a residence, have been bought in the name of anonymous, offshore entities to protect their owners’ identity.
This presents the “most blatant case” of British Virgin Islands secrecy in Britain, according to a joint investigation by the London Guardian newspaper and the ICIJ.
The investigation found that registering the apartments at One Hyde Park, which cost from $4.8 million to $217 million, in the British Virgin Islands – a tiny Caribbean nation of a little more than 27,000 people – was a win-win solution for their foreign owners who, according to the Guardian, some would call “the obscenely rich.” The offshore zone enabled their foreign owners to not only avoid British capital gains and inheritance tax, but also the attention of tax authorities in their own countries.
Akhmetov, according to the investigation, didn’t hesitate to copy his neighbors. In 2007 he paid $217 million for the most expensive property at Hyde Park One – two penthouse flats occupying the top three floors knocked together – using British Virgin Islands-registered Water Property Holdings.
In the past, Akhmetov spokesperson Olena Dovzhenko said the record-breaking London penthouse was a “portfolio investment” made by Akhmetov’s holding company System Capital Management and “was not used by Akhmetov.”
However, SCM representatives would not tell the Kyiv Post how exactly the One Hyde Park property is used.
Akhmetov’s spokesperson, Olena Dovzhenko, did tell the Kyiv Post that Water Property Holdings paid $8.7 million in government duties to the British government when it purchased the property.
“If Akhmetov’s family decides to move and live in the One Hyde Park complex, Mr. Akhmetov will finance this move from his own pocket,” Dovzhenko told the Kyiv Post.
Akhmetov is far from being the only rich Ukrainian with an affinity for upscale London real estate. In 2008, the $124 million 10-bedroom Kensington villa was purchased, according to the Daily Telegraph, by the Victor and Olena Pinchuk family.
Pinchuk’s press service said the property in London was purchased as part of the family’s global investment strategy, but details remain confidential.
Victor Pinchuk became a billionaire by snapping up some of Ukraine’s best industrial assets when his father-in-law, Leonid Kuchma, served as Ukraine’s president from 1994 until 2005.
London also appears to be the choice for Gennadiy Bogolyubov, co-owner of Ukraine’s so-called Privat business group which controls lucrative assets spanning energy, banking, ore mining and passenger airlines.
As the Daily Telegraph reports, in 2010 he purchased a landmark Victorian office building at One Trafalgar Square for more than $260 million and has since gone to court over the commission fees related to the purchase. The Kyiv Post didn’t get an immediate response for comment from Bogolyubov.
While ICIJ and the Guardian haven’t established any wrongdoing behind the secrecy in Akhmetov’s real estate dealings in London, some of his Hyde Park neighbors have reasons to hide behind offshore jurisdictions.
At least one of them, the bankrupt Irish property developer Ray Grehan, is attempting to cheat his creditors, according to the journalists’ investigation.
Meanwhile, more than 30 owners of the four-tower hyper-luxury residential complex still remain anonymous.
As the investigation found, they are shielded in the British Virgin Islands or, even more controversially, non-transparent jurisdictions such as Liechtenstein, St Vincent and Liberia.
Overall, almost 80 percent of Hyde Park One apartments, estimated at more than $1.2 billion in total, have been bought using offshore entities.
Kyiv Post staff writer Vlad Lavrov can be reached at [email protected].
