Leaked documents show Ukraine’s richest person was behind offshore moves to buy a luxury penthouse in London, raising questions over why he isn’t listed on the United Kingdom’s new register meant to expose oligarchs and others who own properties through shell companies.

In July 2021, Cyprus Confidential documents show, Rinat Akhmetov, a Ukrainian billionaire and mining magnate, committed to buying a two-story “grand penthouse” for £87.5 million (about $122 million) in the Belgravia neighborhood through Gelion Properties Ltd., a British Virgin Islands shell company of which he was the beneficial owner. Engineering plans show two upper-floor apartments in the Chelsea Barracks complex combined and then connected with internal staircases.

A luxury-lifestyle magazine described the development of the historic 13-acre site — funded by the Qatari state property development company at an estimated cost of $1.3 billion — as the U.K.’s “most expensive land sale.”

Leaked emails between employees of two Cypriot financial services providers detail plans to use Gelion to buy the property and shield Akmhetov’s identity — a practice that has long been common among high-profile individuals seeking to avoid appearing on the U.K.’s public register of property owners. But under transparency reforms enacted in August 2022 in response to Russia’s invasion of Ukraine, overseas entities that acquire property in the U.K. must also be registered with Companies House, the country’s corporate registry, and publicly disclose details of their beneficial owners.

An aerial view of the sprawling Chelsea Barracks site in the heart of London in 2008, before its redevelopment. Image: Photo by Jason Hawkes/Getty Images

Foreign companies that already owned U.K. properties were given until the end of January 2023 to report beneficial ownership information to the registry. The new law also includes penalties — ranging from hefty fines to a five-year prison sentence — for failure to comply.

However, a BBC analysis showed in May that enforcement had been slow, with U.K. authorities at that time failing to impose over $1.2 billion in fines on offshore companies that missed the registration deadline. As of September, researchers found key beneficial ownership information remained missing or publicly inaccessible for 71% of more than 150,000 properties held by overseas entities.

Experts say there are significant blindspots in the law, which have allowed some beneficial owners to remain anonymous.

A $122 million mystery

Public documents suggest the sale of the penthouse went through in 2022. And, on Jan. 29, 2023, Gelion met the deadline to register its ownership of the property with Companies House. But Akhmetov was not listed as the company’s beneficial owner on the new Register of Overseas Entities, or ROE.

While leaked documents reviewed by ICIJ show that Akhmetov controlled Gelion at the time of the deal, Olena Lutsenko, a Ukrainian national, was listed as its beneficial owner. Her correspondence address is in the Chelsea Barracks, according to the register. Separate residency data obtained by ICIJ shows Lutsenko and Akhmetov as residents of an apartment at another prestigious address in London, on Grosvenor Square in Mayfair.

After publication, a representative for Akhmetov said he does not own or reside at any property on Grosvenor Square and that he could not comment on any relationship of Lutsenko’s to the property. 

Lutsenko is also listed on the U.K.’s corporate register as a U.K. resident with “significant control” of Deston Management Ltd., a London-based company involved in “management consultancy activities.” Deston is mentioned in Cyprus Confidential files as helping to oversee the decoration of the Chelsea Barracks “grand penthouse” for Gelion.

Lutsenko declined to comment to ICIJ by phone on her role in the management of the Chelsea Barracks penthouse.

Prior to publication, Akhmetov declined to address questions on Gelion’s acquisition of the property and whether the company was part of a trust structure, which would change its reporting obligations under the ROE.

However, he has since confirmed through a representative that he invested in the Chelsea Barracks development through Gelion in 2021, then “exited this investment for the benefit of an independent third party in 2022.” That statement noted that both the investment and divestment were done in compliance with relevant U.K. law and disclosure requirements and that Akhmetov should not be listed on the country’s public registers as he is not the beneficial owner of the Chelsea Barracks penthouse. 

Despite substantial financial losses due to Russia’s war in Ukraine, Akhmetov is worth an estimated $5.7 billion. ICIJ’s Cyprus Confidential investigation revealed the scale of Akhmetov’s global business holdings, including direct or indirect interests in 60 offshore companies, primarily registered in Cyprus. Akhmetov is not under sanctions, nor has he been charged with any crimes.

In 2011, Akhmetov made a similar investment in London, merging two penthouses into a bigger one for £136.4 million (more than $210 million at the time) at another luxury development, One Hyde Park, according to The Guardian. That property appears on the Companies House register with an offshore trustee firm listed as its beneficial owner as of January 2023.

Secrecy in trusts

It is not possible to determine from public filings why Lutsenko was listed as the beneficial owner of Gelion, though a change of ownership may have occurred of which ICIJ has not found evidence. Another explanation may be that the company is part of a trust structure. Under a trust, it is possible to benefit from a property without having to disclose the interest publicly, according to Andy Summers, an associate professor of law at the London School of Economics specializing in taxation and offshore structures.

If such a structure was used by Akhmetov, it could explain why his name is missing from the register, because information about trust beneficiaries is not made public under the ROE, although it may be shared with Companies House. Instead, the public filing would likely show the owners of the trust company, or trustees, as the registered beneficial owners, despite them not being the true beneficiary of the asset.

This gap is something some lawmakers and experts view as a key weakness in the new register. At present, public filings don’t reveal if Gelion is part of a trust structure with Lutsenko acting as a trustee, and ICIJ could not determine whether that is the case from Cyprus Confidential documents or elsewhere.

Some 69,000 U.K. properties are held in overseas trusts, according to a research paper co-authored by Summers, “meaning that the beneficial owners of the property are not made public.” That amounts to 27% of all overseas entities on the register.

This September, the U.K. government rejected proposed amendments to the law that would have addressed the trust-related transparency gap. In parliament, Labour lawmaker Margaret Hodge said that lawyers were “exploiting that loophole, and we should stop it because … it is damaging our sanctions policy.”

Kevin Hollinrake, the government minister in charge of the policy area, explained the decision by saying that “the information on trusts is already provided to the registrar when an overseas entity registers on the register.” He added that the registrar discloses trust information to HM Revenue and Customs, the U.K.’s tax agency; law enforcement; and other public officials “if and when necessary and appropriate.”

A Companies House spokesperson told ICIJ that the government is committed to launching a public consultation before the end of the year on how to improve transparency around trust information.

In August 2022, the government touted the launch of the ROE as a world-leading reform “to root out corrupt oligarchs and elites attempting to hide ill-gotten gains through UK property.” But, alongside the widespread criticism of gaps in the law, transparency advocates have expressed concerns over how it has been enforced.

Last week, the Financial Times reported that U.K. authorities have issued more than 120 financial penalties to offshore companies for failing to register with Companies House.

Ben Cowdock, head investigator at anti-corruption advocacy group Transparency International UK, welcomed the news but warned the real challenge will be ensuring the fines are paid.

“It’s good to see that [the government] are finally starting to take more action,” he told the Financial Times.

Update Dec. 12: This story was updated to include information from a statement provided to ICIJ after publication by a representative for Rinat Akhmetov relating to the Chelsea Barracks and Grosvenor Square properties.