Scottish firms linked to gas tycoon sanctioned over Russia 5

Scottish firms linked to gas tycoon sanctioned over Russia

Dozens of firms registered at an Edinburgh address involve a man sanctioned by the United Nations who is linked to a gas tycoon blacklisted by the UK Government for aiding Russia’s occupation of Ukraine.

The Ferret looked at 93 companies with addresses provided by MYCO works, a firm which provides business addresses for clients across the world. 

We found that 38 firms registered with MYCO name Matthew Bradley in their accounts, who was sanctioned by the UN after a fraud investigation into Scottish Limited Partnerships (SLPs). 

An SLP is a form of limited partnership registered under Scots law. They are used by thousands of legitimate UK businesses, but some have been used in money laundering scandals, prompting calls for reform.

Bradley is linked to Serhiy Kurchenko, a Ukrainian billionaire dubbed the “Gas King” who fled to Russia after it was alleged he failed to pay tax. Kurchenko previously denied the allegations.

Scots politicians are calling on the authorities to investigate Bradley while criticising the regulation of “opaque business arrangements” in the UK.

The Ferret found Bradley was linked to 38 SLPs registered with MYCO. Four are owned by Bradley, and seven were incorporated by Belizean companies with his signature. The remaining 27 companies are indirectly linked to Bradley through associates.

All of the firms were incorporated between 2008 and 2016. MYCO sold them its registered address services, providing them with a new “virtual” Scottish address between February and April this year.

Bradley ran a Ukrainian holding firm called UMH Group after it was bought by Kurchenko, who became a billionaire after founding Gas Ukraine 2009. A holding company is a financial organisation that owns a controlling interest in other firms, which are called subsidiaries. 

The UK’s patchwork of anti-money laundering supervisors has failed to ensure businesses are fulfilling their roles as the first line of defence against dirty money.

Steve Goodrich, head of research and investigations at Transparency International UK

Kurchenko was sanctioned by the UK in 2020. The UK Government alleged he “facilitated the supply of oil from Russian companies to their Crimea-based subsidiaries in the first year of Russian occupied Crimea, enabling the Russian companies to bypass EU sanctions”.

In April this year, the EU sanctioned Kurchenko for “benefitting from Russian decision-makers responsible for the illegal annexation of Crimea or the destabilisation of eastern Ukraine”.

Links to sanctioned firms

Bradley owned UMH Group and several media outlets through a Hong Kong Company called Bentley Overseas Limited.

Kurchenko bought UMH Group in 2013 through his firm, VETEK, which released a statement confirming the purchase. In 2017, after Kurchenko fled the country, Ukrainian prosecutors moved to seize UMH Group’s assets as part of the “criminal group organised by Serhiy Kurchenko”. 

After VETEK announced the purchase of the media group, Bradley was still officially named as the ultimate beneficial owner in company structure documents.

In 2019, a Kyiv court placed a number of Kurchenko’s companies under the control of the Asset Recovery and Management Agency, including Bentley Overseas Limited.

In 2015, a company called Bentley Overseas Services L.P. was registered in the UK. 

In 2018 the UN Development Programme debarred some Scottish firms after uncovering fraud in its global aid programme, and discovering Bradley was the person of significant control of 20 SLPs. He was sanctioned by UNDP on grounds of fraud, collusion and obstruction and is still currently debarred.

MYCO Works and The Edinburgh Office

The Ferret reported last year that The Edinburgh Office, now called MYCO, had incorporated companies allegedly linked to tax avoidance. 

The Edinburgh Office lawfully used 101 Rose Street South Lane as the registered address for around 2,000 companies. The firm has since changed its name MYCO and its new address is 5 South Charlotte Street, Edinburgh.

2017 money laundering regulations require company formation agents to “establish and maintain policies, controls and procedures to mitigate and manage effectively the risks of money laundering and terrorist financing”. 

There is no suggestion that MYCO are acting unlawfully or know anything about their client’s activities. They previously stated that they make all necessary checks.

MYCO told The Ferret that, while they host registered offices, they do not incorporate or provide SLPs.

It speaks to the woeful lack of safeguarding within the UK Government’s regulatory framework that a suspected pseudonym can own 40 companies registered in Edinburgh without setting any alarm bells ringing. I would urge the UK Government to undertake a full and proper investigation.

Alison Thewliss MP, SNP shadow treasury spokesperson

The LibDems’ economy spokesperson Willie Rennie said: “Networks of shell companies and obscure ownership should be seen as an attack on everyone who plays by the rules and pays their way.

“Scottish Liberal Democrats have consistently pressed the Conservatives and SNP to get serious about tracing who owns land, property and businesses and not allowing them to hide behind opaque business arrangements such as these. The authorities should investigate the mysterious Matthew Bradley.”

Alison Thewliss MP, the SNP’s shadow treasury spokesperson, said: “It speaks to the woeful lack of safeguarding within the UK Government’s regulatory framework that someone can own 38 companies registered in Edinburgh without setting any alarm bells ringing. I would urge the UK Government to undertake a full and proper investigation.”

A UK Government spokesperson said: “The misuse of Scottish Limited Partnerships by those with criminal intent is appalling. Company formation agents are required by law to register for anti-money laundering supervision, as well as conduct customer due diligence (CDD) checks.

“Our Economic Crime Bill will reform the law on limited partnerships as well as strengthening the powers of Companies House to give it a bigger role in tackling economic crime.”

Steve Goodrich, head of research and investigations at Transparency International UK, said: “Currently, Companies House is an honesty box, relying on those incorporating and maintaining businesses in the UK to tell the truth about their owners. 

The authorities should investigate the mysterious Matthew Bradley

Willie Rennie MSP, Scottish Lib-Dems

“Anyone who provides corporate services here should be checking who their customers really are. There are 25 bodies responsible for overseeing compliance with these rules, with 13 for covering the accountancy sector alone.

The UK’s patchwork of anti-money laundering supervisors has failed to ensure businesses are fulfilling their roles as the first line of defence against dirty money.”

A spokesperson for UNDP said it could not share confidential information regarding vendor sanctions.  

They added: “Please be advised that vendors who engage in proscribed practices are not blacklisted by UNDP. UNDP follows a detailed administrative process that affords all vendors due process right prior to the issuance of a sanction.

“This is combined to the due process rights afforded to vendors by UNDP’s Office of Audit and Investigations during the investigation process, including having the opportunity to be interviewed and provide countervailing evidence.”

Bradley did not reply to our requests for a comment.

The Ferret was unable to contact Kurchenko.

Photo thanks to iStock and Vadzim Kushniarou

This report was co-published by The Herald.

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