Panama Papers: Dmitry Rybolovlev used offshore company to hide art from wife, leaked documents reveal
Russian billionaire transferred ownership of paintings by Picasso, Van Gogh and Monet to firm based in British Virgin Islands
| 4 April 2016
Dmitry Rybolovlev. Photo: AP Photo/Lionel Cironneau)
The Russian billionaire Dmitry Rybolovlev used a company registered in the British Virgin Islands to hide art from his former wife Elena during their divorce proceedings. The same company helped Rybolovlev move paintings by Picasso, Van Gogh and Rothko, among others, out of Switzerland to London to keep them out of Elena’s grasp.
The revelation comes from the International Consortium of Investigative Journalists (ICIJ) which has spent the past year examining over 11 million documents leaked from Mossack Fonseca, a Panama-based law firm specialising in wealth management and the creation of offshore shell companies. The leaked data covers nearly 40 years up to 2015 and provides an unprecedented look at the offshore banking industry and how money is moved secretly, and sometimes illegally, around the world.
The ICIJ has worked with the German newspaper Süddeutsche Zeitung and 100 other news organisations to analyse the data in what amounts to the biggest media collaboration ever undertaken.
The offshore holdings of 12 current and former world leaders including the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan have been exposed. World leaders who have embraced anti-corruption platforms such as the Ukrainian President Petro Poroshenko and the family of Chinese president Xi Jinping also feature in the leaked documents, writes the ICIJ.
Mossack Fonseca “has serviced enough Middle East royalty to fill a palace,” the ICIJ reports. The Panamanian firm also “has details on at least 33 people and companies blacklisted by the US, including Mexican drug lords and terrorist organizations…Its fingers are in Africa’s diamond trade, the international art market and other businesses that thrive on secrecy.”
The revelation comes from the International Consortium of Investigative Journalists (ICIJ) which has spent the past year examining over 11 million documents leaked from Mossack Fonseca, a Panama-based law firm specialising in wealth management and the creation of offshore shell companies. The leaked data covers nearly 40 years up to 2015 and provides an unprecedented look at the offshore banking industry and how money is moved secretly, and sometimes illegally, around the world.
The ICIJ has worked with the German newspaper Süddeutsche Zeitung and 100 other news organisations to analyse the data in what amounts to the biggest media collaboration ever undertaken.
The offshore holdings of 12 current and former world leaders including the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan have been exposed. World leaders who have embraced anti-corruption platforms such as the Ukrainian President Petro Poroshenko and the family of Chinese president Xi Jinping also feature in the leaked documents, writes the ICIJ.
Mossack Fonseca “has serviced enough Middle East royalty to fill a palace,” the ICIJ reports. The Panamanian firm also “has details on at least 33 people and companies blacklisted by the US, including Mexican drug lords and terrorist organizations…Its fingers are in Africa’s diamond trade, the international art market and other businesses that thrive on secrecy.”
The art connection
In December 2008 Elena Rybolovleva filed for divorce from her husband Dmitry, who is now embroiled in a separate legal battle with his former art advisor Yves Bouvier. The Rybolovlevs were based in Switzerland and under Swiss law each spouse was entitled to an equal part of the couple’s wealth.
But tracking down Dmitry Rybolovlev’s assets was not easy. Mossack Fonseca had helped the businessman transfer ownership of many of his art assets to a company they set up for him in the British Virgin Islands, Xitrans Finance Ltd. This off-shore firm owned paintings by Picasso, Modigliani, Van Gogh, Monet, Degas and Rothko and “also bought Louis XVI-style desks, tables and drawers made by some of Paris’s grandest furniture makers,” the ICIJ writes.
“As the marriage broke down, according to notes from a court hearing sent via email to Mossack Fonseca in January 2009, [Rybolovlev] used Xitrans Finance Ltd to move these luxury items out of Switzerland to Singapore and London, beyond [his wife’s] reach.”
Update, 6 April: In a statement, the Rybolovlev family's lawyer said the "description and references to the divorce proceedings of Mr Dmitriy Rybolovlev are misleading", since it "fails to state that the ex-spouses Rybolovlev amicably settled their matrimonial dispute and announced in a joint statement dated 20th October 2015". He added that Rybolovlev "has never used any offshore entity to conceal any assets". Xitrans Finance was established in 2002, six years before the divorce proceedings began, and that its use "as a holding entity to constitute a remarkable art collection has been publicly disclosed in numerous publications worldwide and is perfectly legitimate,” the lawyer said.
But tracking down Dmitry Rybolovlev’s assets was not easy. Mossack Fonseca had helped the businessman transfer ownership of many of his art assets to a company they set up for him in the British Virgin Islands, Xitrans Finance Ltd. This off-shore firm owned paintings by Picasso, Modigliani, Van Gogh, Monet, Degas and Rothko and “also bought Louis XVI-style desks, tables and drawers made by some of Paris’s grandest furniture makers,” the ICIJ writes.
“As the marriage broke down, according to notes from a court hearing sent via email to Mossack Fonseca in January 2009, [Rybolovlev] used Xitrans Finance Ltd to move these luxury items out of Switzerland to Singapore and London, beyond [his wife’s] reach.”
Update, 6 April: In a statement, the Rybolovlev family's lawyer said the "description and references to the divorce proceedings of Mr Dmitriy Rybolovlev are misleading", since it "fails to state that the ex-spouses Rybolovlev amicably settled their matrimonial dispute and announced in a joint statement dated 20th October 2015". He added that Rybolovlev "has never used any offshore entity to conceal any assets". Xitrans Finance was established in 2002, six years before the divorce proceedings began, and that its use "as a holding entity to constitute a remarkable art collection has been publicly disclosed in numerous publications worldwide and is perfectly legitimate,” the lawyer said.
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Museums
Panama Papers expose art world's offshore secrets
Leaked documents reveal owners of "looted" Modigliani, how a UK billionaire guaranteed a milestone auction and links to the Chinese elite
| 8 April 2016
The Victor and Sally Ganz auction at Christie's © STAN HONDA/AFP/Getty Images
The International Consortium of Investigative Journalists (ICIJ) has turned its attention to the art world in its ongoing examination of documents leaked from Mossack Fonseca, a Panama-based law firm specialising in wealth management.
The ICIJ has revealed that a painting by Modigliani that is being claimed by the grandson of Oscar Stettiner, a Jewish gallery owner whose art was seized by the Nazis, is owned by a company controlled by the Nahmad family of art dealers, who have previously denied that the work was in their possession.
The ICIJ has revealed that a painting by Modigliani that is being claimed by the grandson of Oscar Stettiner, a Jewish gallery owner whose art was seized by the Nazis, is owned by a company controlled by the Nahmad family of art dealers, who have previously denied that the work was in their possession.
Modigliani 's Seated Man with a Cane (1918)
The canvas in question, Seated Man with a Cane (1918), was bought by the Nahmads at auction in 1996, reports the ICIJ. They paid just over £2m for the painting at Christie’s London in June of that year. In November 2008, the Nahmads tried to sell the work at Sotheby’s New York with an estimate of $18m to $25m, but there were no bids on the canvas.
In 2011, Philippe Maestracci, Oscar Stettiner’s grandson, sued the Nahmads in US federal court for the return of the Modigliani; the suit was withdrawn after the Nahmads said that the painting was owned by a company called the International Art Center and not by them.
Three years later, in February 2014, the administrator of the Stettiner estate sued the Nahmads again, arguing that the International Art Center is a Panamanian shell company, which is an “alter ego of David Nahmad and other Nahmad family members”, according to the court papers. “The Nahmads have insisted in federal and state court in New York that the family does not possess the Modigliani,” the ICIJ reports.
But the leaked Mossack Fonseca documents show that “the Nahmad family has controlled the Panama-based company International Art Center (IAC) for more than 20 years… David Nahmad, the family leader, has been the company’s sole owner since January 2014”, the ICIJ reports. Mossack Fonseca first set up the IAC for the Nahmads in 1995.
When the ICIJ confronted David Nahmad’s lawyer, Richard Golub, with documentation showing that the Nahmads own the International Art Center, Golub said: “Whoever owns IAC is irrelevant. The main thing is: what are the issues in the [ongoing] case, and can the plaintiff prove them?”
In 2011, Philippe Maestracci, Oscar Stettiner’s grandson, sued the Nahmads in US federal court for the return of the Modigliani; the suit was withdrawn after the Nahmads said that the painting was owned by a company called the International Art Center and not by them.
Three years later, in February 2014, the administrator of the Stettiner estate sued the Nahmads again, arguing that the International Art Center is a Panamanian shell company, which is an “alter ego of David Nahmad and other Nahmad family members”, according to the court papers. “The Nahmads have insisted in federal and state court in New York that the family does not possess the Modigliani,” the ICIJ reports.
But the leaked Mossack Fonseca documents show that “the Nahmad family has controlled the Panama-based company International Art Center (IAC) for more than 20 years… David Nahmad, the family leader, has been the company’s sole owner since January 2014”, the ICIJ reports. Mossack Fonseca first set up the IAC for the Nahmads in 1995.
When the ICIJ confronted David Nahmad’s lawyer, Richard Golub, with documentation showing that the Nahmads own the International Art Center, Golub said: “Whoever owns IAC is irrelevant. The main thing is: what are the issues in the [ongoing] case, and can the plaintiff prove them?”
The Ganz auction
The ICIJ has also shed new light on an auction of Modern art at Christie’s New York in November 1997. The sale of work collected by Victor and Sally Ganz included pieces by Picasso, Jasper Johns, Robert Rauschenberg and many others. It made a then record $206.5m and “proved a milestone in the transformation of art into a global commodity”, the ICIJ writes.
The Mossack Fonseca papers show that many of the key works in the Ganz collection were sold six months before the Christie’s auction to a company called Simsbury International Corp. This was set up in Niue, an island in the South Pacific, and administered by Mossack Fonseca. The works were sold to Simsbury for $168m from Spink & Son, the London auction house then owned by Christie’s, according to the ICIJ.
The man who controlled Simsbury was the British billionaire Joseph Lewis, who was then the richest man in England and the largest shareholder at Christie’s. The terms of the deal stipulated that the Simsbury-owned works would still be offered for sale as part of the Ganz collection at Christie’s: if they made more than Simsbury had paid for them, Lewis and Spink & Son would share the difference, the ICIJ reports.
The Ganz family and Lewis declined to speak to the ICIJ about the revelations.
The Mossack Fonseca papers show that many of the key works in the Ganz collection were sold six months before the Christie’s auction to a company called Simsbury International Corp. This was set up in Niue, an island in the South Pacific, and administered by Mossack Fonseca. The works were sold to Simsbury for $168m from Spink & Son, the London auction house then owned by Christie’s, according to the ICIJ.
The man who controlled Simsbury was the British billionaire Joseph Lewis, who was then the richest man in England and the largest shareholder at Christie’s. The terms of the deal stipulated that the Simsbury-owned works would still be offered for sale as part of the Ganz collection at Christie’s: if they made more than Simsbury had paid for them, Lewis and Spink & Son would share the difference, the ICIJ reports.
The Ganz family and Lewis declined to speak to the ICIJ about the revelations.
Agents to the art world
The offshore dealings of other major art collectors are also detailed by the ICIJ. Mossack Fonseca’s records mention “enough art to fill a small museum”, they report.
Chen Dongsheng, the founder and chairman of China Guardian, the world’s third biggest art auction house after Sotheby’s and Christie’s, and grandson-in-law of Mao Zedong, is one of many rich Chinese businessmen and political leaders who have moved assets offshore. He is the sole director and shareholder of Keen Best International Limited, a company set up by Mossack Fonseca in the British Virgin Islands in 2011.
Chen Dongsheng, the founder and chairman of China Guardian, the world’s third biggest art auction house after Sotheby’s and Christie’s, and grandson-in-law of Mao Zedong, is one of many rich Chinese businessmen and political leaders who have moved assets offshore. He is the sole director and shareholder of Keen Best International Limited, a company set up by Mossack Fonseca in the British Virgin Islands in 2011.
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