Petro Poroshenko registered company when his troops were being wiped out in eastern Ukraine, Panama Papers show

Ukraine’s president, Petro Poroshenko, set up a secret offshore company in the British Virgin Islands at a time when his troops were being wiped out in a bloody battle with Russian troops and pro-Moscow rebels.

Leaked documents from the Panamanian law firm Mossack Fonseca show that Poroshenko registered the company, Prime Asset Partners Ltd, on 21 August 2014. Records in Cyprus list him as the firm’s only shareholder. They give his official address in Ukraine’s capital, Kiev – apartment 39, Hrushevskoho Street.

The registration coincided with one of the most notorious fights in the war in Ukraine, between the Ukrainian army and Kremlin-supplied insurgents. On 20 August 2014, government troops found themselves surrounded in the eastern city of Ilovaisk. As many as 1,000 soldiers were killed as they tried to retreat under rebel and Russian fire. Several hundred more were wounded or captured.

Facebook Twitter Pinterest Petro Poroshenko arrives for dinner at the White House last week. Photograph: Olivier Douliery/AFP/Getty Images

Poroshenko was elected in May 2014, promising to clean up Ukraine’s chronically corrupt politics.

His predecessor, Viktor Yanukovych, fled to Russia after his security forces shot dead 100 protesters on the streets of the capital. This followed months of anti-government rallies. Russia’s president, Vladimir Putin, responded by seizing Crimea and kickstarting an armed separatist rebellion in the Donetsk and Luhansk regions of industrial eastern Ukraine.

A self-made tycoon, Poroshenko vowed before the election to divest himself of his extensive business interests. He promised to “wipe the slate clean” by selling his Roshen chocolate factory, telling the German tabloid Bild: “I will and want to only focus on the wellbeing of the nation.”

So far, however, the president still controls Roshen. He also owns a major TV channel. His private assets are larger than those of any other European leader, with his fortune put by Bloomberg at about $720m.

On Monday Poreshenko tweeted: “I believe I might be the first top official in Ukraine who treats declaring of assets, paying taxes, conflict of interest issues seriously. Having become a President, I’m not participating in management of my assets, having delegated this responsibility to consulting & law firms.”

Петро Порошенко (@poroshenko) I believe I might be the first top official in Ukraine who treats declaring of assets, paying taxes, conflict of interest issues seriously

Петро Порошенко (@poroshenko) Having become a President, I'm not participating in management of my assets, having delegated this responsibility to consulting&law firms

Poroshenko’s spokesman said the president had fully disclosed all his assets in accordance with Ukrainian law. His offshore company was set up as part of the process of transferring his assets to a blind trust. He said the trust was managed by independent professional advisors “without any relation to any political and miliary events in Ukraine”.



The Panama Papers show that Poroshenko used a Cypriot agent to register his new BVI firm. It is not illegal to open an offshore account. The president supplied a utility bill and a reference from the International Investment Bank (IIB) in Kiev.

The letter, dated October 2014 and marked confidential, says Poroshenko has been a customer of the IIB since 2009 and conducted his accounts “to our satisfaction”. It fails to mention one detail: Poroshenko owns the bank.

In emails to Mossack Fonseca, the agent describes Poroshenko as “a person involved in politics”. He says the new firm will have nothing to do with Poroshenko’s “political activities” and calls it “a holding company of Cyprus and Ukrainian companies of the Roshen Group, one of the largest European manufacturers of confectionery products”.

Poroshenko’s company in Ukraine has a similar name, Prime Assets Capital investment.

According to Ukraine’s media, it co-owns the IIB. Other bank shareholders include Poroshenko’s close ally Ihor Kononenko, the influential deputy chief of the president’s parliamentary party, widely seen as the grey cardinal of Ukrainian politics.

The fact that Poroshenko was setting up new offshore structures while president, at a time when his country was embroiled in a conflict in which at least 9,000 people have been killed, is likely to raise eyebrows. It comes amid rising domestic and international criticism over his government’s failure to carry out reforms.

The Kyiv Post on Monday reported that the arrangement may have saved the president millions of dollars in Ukrainian taxes. It noted that Ukraine’s government is actively fighting the use of offshore companies, which are estimated to cost Ukraine $11.6bn a year in lost revenues.

Poroshenko’s professional advisers, Investment Capital Ukraine, said the president’s offshore company was “merely a technical vehicle”. The financial advisers Rothschild have been trying to sell Roshen, they added, but have struggled to find a buyer. Efforts are continuing, they said. They added that Prime Assets Partners was set up “in the course of corporate restructuring” prior to the Roshen sale.



In February, the International Monetary Fund said it would halt its $40bn (£28bn) bailout programme to Ukraine unless the country took immediate action to tackle widespread corruption. The IMF’s managing director, Christine Lagarde, said she was concerned about Ukraine’s slow progress in improving governance and reducing “vested interests in policymaking”.

Her comments followed the dramatic resignation of Ukraine’s economy and trade minister, Aivaras Abromavičius. He accused Kononenko, Poroshenko’s friend and business partner, of corruption analogous to that practised by the former Yanukovych regime.

Last year, Ukraine’s media reported that Kononenko was linked to an offshore company called Intraco Management Ltd. It alleged the firm transferred hard currency to Kononenko’s daughter Darya, and also maintained a private jet used by the president. The BVI company was founded in 2002, leaked documents show. Its Cyprus-based agent, Geoffery Magistrate, is linked to Poroshenko. In a 2008 email, Magistrate refused to say who owned Intraco, adding: “Shareholder not needed … its [sic] fine thank you.”

Kononenko denied that he was a beneficial owner or director of Intraco, and said he was the vctim of a “made to order story” repeated in articles and on TV. “Their one goal is to discredit a person in the eyes of viewers and readers,” he said, adding that the phenomenon is “particularly active” during elections.

The Panama Papers reveal that Yanukovych’s government colleagues – most of them now in exile – were prolific users of offshore companies. Oleksii Azarov – the businessman son of Yanukovych’s prime minister, Mykola Azarov – set up 26 BVI firms in 2012, while his father ran the government. They include a hub firm, Lazonby Group Holdings Ltd, administered by Bridgewaters, a financial services company in the Isle of Man.

In April 2014, the EU sanctioned the Azarovs and other members of Yanukovych’s inner circle. They were accused of involvement in “crimes in connection with the embezzlement of Ukrainian state funds and their illegal transfer outside Ukraine”, the EU said. In January 2016, Oleksii Azarov – who lives in Vienna – got the sanctions overturned. His offshore accounts, held with Julius Baer bank in Switzerland and the Hellenic Bank of Cyprus, were unfrozen.

Lawyers for Azarov argued that the EU had relied entirely on what they described as questionable evidence provided by Ukrainian prosecutors. An EU court ruled that a letter from Ukrainian prosecutors did not provide proper evidence. The court concluded that it did not meet EU criteria for freezing the assets of the men.

In a statement his lawyers said on Monday: “All accusations against our client come from the politically biased judiciary in Ukraine and all accusations have a solely political background.”



Critics say Poroshenko has been reluctant to investigate former members of the Yanukovych government, few of whom have been prosecuted. They suggest that the president is aware he may not win a second term in office – and thinks that Yanukovych’s allies could at some point come back. Meanwhile, they are in a position to help – or hinder – any peace deal between the government and rebels in Ukraine’s east.



Another of Yanukovych’s close allies, Yuriy Ivanyushchenko, had secret offshore companies, the papers reveal. Ivanyushchenko is a former MP from the ex-president’s Party of Regions. The EU and Switzerland have sanctioned him.

Ivanyushchenko’s wife Iryna shows up as the owner of Ireton Commercial Ltd, registered in the BVI. His son Arsen owns the Skyrose Group, a shareholder in Ukraine’s biggest outdoor market near Odessa.

Ivanyushchenko’s whereabouts are unknown. He was on Interpol’s international wanted list, together with other Yanukovych allies, until January. Emails from Mossack Fonseca’s compliance department cite “adverse results” against the MP. They include allegations that Ivanyushchenko was a crime boss in the 1990s and has links to Ukrainian criminal groups, and that he formed and financed “groups of young people” who in 2014 kidnapped, beat up and killed opposition Euromaidan protesters.

In February 2016, Ukraine’s deputy prosecutor general, Vitaly Kasko, quit his job, accusing his boss Viktor Shokin of sabotaging investigations.



Kasko complained that Shokin had thwarted his efforts to prosecute ex-regime figures including Ivanyushchenko, who is accused of embezzlement. Ukraine’s parliament voted last week to sack Shokin. On Monday, Poroshenko said he had signed a decree dismissing Shokin from his job. Shokin denies wrongdoing.

Bridgewaters, Azarov and Ivanyushchenko did not respond to requests for comment.

This article was amended on 4 April 2016. Aivaras Abromavičius was Ukraine’s economy and trade minister, not the finance minister as originally stated.



Panama Papers reporting team: Juliette Garside, Luke Harding, Holly Watt, David Pegg, Helena Bengtsson, Simon Bowers, Owen Gibson and Nick Hopkins