The venue was one of Moscow’s fanciest Italian restaurants. Sitting at a reserved VIP table was a man in an unbuttoned white shirt sporting chunky gold jewellery. This was David Kaplan, a Russian-Israeli multimillionaire and fan of Italian food. Next to him was a model.

Also at the table was Kirsan Ilyumzhinov, president of Fide and head of the Russian republic of Kalmykia, Europe’s only Buddhist region. Ilyumzhinov claimed to have been kidnapped by aliens. They had taken him from the balcony of his Moscow flat and “shown him some kind of star”.

David Kaplan with his sister Ludmila at his 46th birthday party in Sardinia. Photograph: ok.ru

The subject of conversation wasn’t oil or Siberian gas or friendly visiting UFOs. Rather, what was discussed over plates of antipasto were the commercial rights to world chess. The year was 2007. The previous year, Ilyumzhinov had set up a private Dutch-based company called Global Chess BV.

That autumn, however, Ilyumzhinov told his Fide colleagues he had another idea. Instead of handing rights to Global Chess he was going to sell them to Kaplan, a man who mixed with oligarchs, went skiing in Courchevel and had a villa in Sardinia. Kaplan had no experience of chess whatsoever.

“He [Ilyumzhinov] told us he had found this guy,” one person involved in the negotiations said. “He was presented as someone worth $100m.” Curiously, Kaplan didn’t have an internet footprint. “It was quite weird,” the person said. “There was nothing on how he had made his fortune.”

The person added: “Kaplan was a guy in his 40s. He looked like a playboy and was obviously very rich. He had a love of Italian food with tables at the best restaurants in Moscow reserved for him. His personal assistant carried around his four mobile phones. He also owned a model agency. Each time we went out he had a different model by his side.”

David Kaplan, right, with Ludmila and the singer Craig David. Photograph: ok.ru

Kaplan’s vision for how chess might develop seemed ridiculous. According to the source, one idea voiced by Kaplan was to build chess “towers” in 10-15 capitals around the world, featuring offices and flats, in the shape of a rook. “We were listening to this guy. It was clear he didn’t know what he was talking about,” the person said.



Nonetheless, a memorandum drawn up between Global Chess and Fide was hastily rewritten. Digital and all other rights to the world’s preeminent mind sport were transferred to Chess Lane, a new offshore company registered in the British Virgin Islands and its capital Tortola. Seemingly, the company belonged to Kaplan.

A Panamanian law firm popular with Moscow oligarchs acted as agent. This was Mossack Fonseca. Kaplan’s name, however, was kept secret. Instead, he registered it in the name of his relatives. These were his nephew Eli Leibzon, and Eli’s father Avi, the ex-husband of Kaplan’s sister Ludmila.

Lawyers from Allen & Overy’s Amsterdam office drew up a notarial agreement.

The corporate web stretched from Chess Lane to other anonymous Kaplan-linked firms, including Orion Global Commodities Corp and Binkler Ltd. Some believed the real owners were two brothers from Dagestan, Ziyavudin and Mohammed Magomedov, for whom Kaplan reportedly acted as chief of staff. The Magomedovs did not comment.



Ilyumzhinov’s appearance in the Panama Papers is expected to provoke fresh criticism of his management of international chess – “a disaster” in the words of one opponent, who cited his failure to attract western sponsors or hold tournaments in high-profile cities.



The chess world is bitterly divided between supporters of Ilyumzhinov and those who back Garry Kasparov, Ilyumzhinov’s defeated 2014 Fide election rival. As in cold war times, chess is at the centre of a battle between east and west, with Vladimir Putin apparently determined to retain control.



Facebook Twitter Pinterest Garry Kasparov. Photograph: Mikhail Metzel/AP

Critics say Ilyumzhinov has a record of contacts with shady businessmen and dictators. They point to his meetings with Bashar al-Assad, Saddam Hussein and Muammar Gaddafi. Others say that Ilyumzhinov is more sad than bad, adding that his attempts to commercialise world chess are sincere, but repeatedly hopeless.

So keen was Putin for Kasparov not to be elected in 2014 that Russian ambassadors were instructed to lobby on Ilyumzhinov’s behalf. Photos of Putin adorn Fide’s website. In return, Ilyumzhinov functions as an informal Kremlin emissary.



Fide is hoping that, in November, New York will be the host city for the scheduled world championship match between the titleholder, the Norwegian world number one Magnus Carlsen, and the Ukrainian-born but Russian-affiliated challenger Sergei Karjakin.

Facebook Twitter Pinterest Kirsan Ilyumzhinov and Vladimir Putin at a World Championship chess match in Sochi in 2014. Photograph: Sasha Mordovets/Getty Images

It is unclear, however, if Ilyumzhinov will attend. He said he still had a US visa, valid until 2018, and could travel to America despite sanctions imposed on him last year. “Sanctions or no sanctions, I will carry on as before,” Ilyumzhinov told Süddeutsche Zeitung.

Many believe the venue will be changed at the last minute to a provincial Russian city like Sochi – or possibly even to Crimea, annexed by Putin in 2014. Ilyumzhinov, however, insisted the match would go ahead in New York. “I guarantee it,” he said.

Karjakin, though born in Ukraine and a citizen of the country until 2009, controversially supported Crimea’s annexation. He qualified for the title match against Carlsen in a tournament in which he finished ahead of two strongly fancied American players.

This has made finding sponsors for the planned match in New York much harder, and made the switch to a Russian venue more likely, accentuating Fide’s continuing problems in commercialising chess and building mainstream media coverage, especially in the west.

The English Chess Federation has backed Kasparov in this long-running feud. But some senior UK chess figures have sided with Ilyumzhinov. They include Graham Boxall, Fide’s internal auditor. An offshore lawyer based in Jersey, he appears in the Panama Papers, and is the director of several Mossack-Fonseca-created companies.

Nigel Freeman, Fide’s executive director, lived for several decades in the tax haven of Bermuda. Another key figure is Andrew Paulson, a US citizen who spent two decades in Moscow and who speaks fluent Russian. He now lives in London. Paulson, who set up Agon, the company that has controlled Fide’s commercial rights since 2012, appears in the Panama Papers in connection with Russian media holdings.

On Friday Paulson said he had long ago sold Agon and distanced himself from the chess world. He said that as president of the English Chess Federation he had “strongly and publicly opposed” Ilyumzhinov.

Paulson added: “It was fascinating to penetrate into the core of such a bizarre organisation. I both loved and hated most of the people I met. I thought I was going to be able to turn chess into a spectator sport and develop its commercial potential.



“But, in the end, these people were really not very commercially minded or very talented businessmen. It was very difficult to work with them.”

Facebook Twitter Pinterest Nigel Short. Photograph: Alamy

Nigel Short, a prominent Kasparov supporter, has queried payments made to some national chess federations ahead of elections.

Records seen by the Guardian appear to show payments in 2013 of $10,000 to the Mexico federation as a “grant”, $20,000 to Honduras, and $30,000 to Aruba, a tiny Dutch Caribbean island off the coast of Venezuela. Under Fide’s rules smaller countries and micro-territories like Aruba have the same voting rights as giant chess federations such as China.



The loser from Fide’s machinations is chess, according to Short, which is now stuck in the doldrums. “Chess is a very significant sport. It’s extremely international. The game is played by hundreds of millions of people around the world. It has enormous potential. It ought to be doing a lot better than it is.”