Abramovich investment vehicle shifted control shortly after Russia invaded Ukraine

Roman Abramovich’s global empire, including his Chelsea FC soccer team, has been jarred by scrutiny after Russia invaded Ukraine.

Roman Abramovich’s global empire, including his Chelsea FC soccer team, has been jarred by scrutiny since Russia invaded Ukraine. Picture: Alexander Hassenstein/Getty Images

Hours after Russia invaded Ukraine, control of an investment vehicle long linked in public filings to oligarch Roman Abramovich and used to hold stakes in renewable energy and tech start-ups in the US, UK and Israel was moved to one of his business associates, according to securities filings.

Corporate disclosures over years identify British Virgin Islands-listed Norma Investments as being controlled by Mr Abramovich. On February 24, the day Russian troops attacked Ukraine, David Davidovich, a close business associate of Mr Abramovich, took full ownership of the entity, according to securities filings in the UK.

Since that move, the UK has sanctioned Mr Abramovich, accusing him of benefiting from the regime of Russian President Vladimir Putin. On Tuesday, the European Union followed suit. The sanctions subject Mr Abramovich to asset freezes and travel bans in the UK and EU.

A person close to Mr Davidovich confirmed he took control of the entity. Mr Davidovich’s investment in Norma “is part of his overall investments and interest in the start-up sector,” this person said. This person said Mr Abramovich wasn’t Norma’s previous owner but didn’t identify who that was.

Norma is linked to Mr Abramovich in several public filings. For instance, in 2021, a US biotech company backed by Norma said in its annual report filed with the Securities and Exchange Commission that Norma was controlled by Mr Abramovich.

A company filing in 2020 to the London Stock Exchange from AFC Energy, a British fuel-cell company, also listed Mr Abramovich as an indirect investor in the business “through Norma Investments Limited.” Filings show the two men frequently invest in companies together. Mr Davidovich is listed in some filings as the chief executive officer of Millhouse, a Moscow-based investment firm Mr Abramovich started two decades ago.

The shift in control of Norma comes amid a wider effort by the Russian billionaire to shed or move assets in recent weeks, after Western governments threatened to dismantle an empire Mr Abramovich built up since the 1990s because of what they say are ties to Mr Putin and the war in Ukraine. London, Brussels and Washington have all threatened to clamp down on a group of wealthy Russian billionaires such as Mr Abramovich in the hopes of applying pressure on the Kremlin.

Sanctions lawyers say selling assets to associates or transferring ownership to family members can be a way to at least temporarily avert asset freezes, and retain indirect control of assets without technically falling afoul of sanctions. The British Virgin Islands, a British overseas territory where many of Mr Abramovich’s companies are registered, must implement UK sanctions orders. Mr Davidovich is not sanctioned. UK filings say he resides primarily in Israel.

Before being sanctioned in the UK, Mr Abramovich sought to sell his 15-bedroom mansion in London and his soccer club Chelsea FC. He has also tried to sell out of US-based funds, The Wall Street Journal previously reported. Two of his mega yachts recently moved out of harbours that could be subject to EU jurisdiction, according to ship-tracking sites.

The complex ownership structure of Norma Investments points to the challenge that UK, US and European officials face as they try to work out what assets sanctioned oligarchs control. UK officials say that once sanctions are in place assets that are controlled by the sanctioned individuals are frozen. The EU, US and UK have begun sanctioning family members of oligarchs in part to capture transfers that may previously have taken place.

Norma Investments had served as a vehicle for venture-capital investments. Since 2018, Norma has owned MHC Services, a management consultancy working out of Chelsea’s offices, according to MHC’s accounts. Norma invested in US renewable-fuel companies and acquired a stake in British energy company Velocys, according to securities filings. Norma also funded cancer and anti-ageing drug research by a US biotech company, Cleveland BioLabs., which in a 2021 securities filing said Norma was controlled by Mr Abramovich.

Shellanoo Group, an Israeli tech company that Mr Abramovich invested in 2015, said in a 2016 filing that Mr Abramovich bought a stake through a company owned by Norma. It said Norma’s owner was A Corp-Trustee, the trustee of a Cyprus trust called Harmony Trust Settlement. It said Mr Abramovich is the owner of the chain of companies. A Corp-Trustee also owns Mr Abramovich’s London mansion, according to property records.

Many governments have powers to temporarily freeze assets of individuals or entities in their jurisdiction, without proving criminality, through sanctions or other measures. Owners are typically barred from selling or benefiting from them until sanctions are lifted or successfully contested.

Governments typically can’t move to take ownership of the assets, though, except after often-lengthy legal proceedings that would require proof of law-breaking. The UK government, however, is considering laws that would give itself the powers to seize sanctioned assets.

In sanctioning Mr Abramovich, the UK government said he had benefited from the regime of Mr Putin. Once a frequent visitor to London, he hasn’t been seen here much in recent years. He listed his address as Russia in a recent corporate filing.

In recent days Mr Abramovich’s private jet has zigzagged between Israel, where he also has citizenship, Turkey and Russia, according to flight records. On Monday a masked Mr Abramovich was photographed waiting in a VIP lounge in an Israeli airport. Representatives for Mr Abramovich haven’t commented about the sanctions.

Mr Abramovich’s 533-foot superyacht Eclipse was sailing along the Algerian coast in the Mediterranean on Tuesday afternoon, after leaving Philipsburg, in the Dutch Antilles in the Caribbean, according to vessel-tracking site FleetMon. The islands are a constituent country of the Netherlands, part of the EU.

Mr Abramovich’s 460-foot My Solaris, meanwhile, was sailing in the Eastern Mediterranean, having left Barcelona and stopping briefly at Tivat in Montenegro, according to FleetMon. Spain is an EU member. Montenegro isn’t but has said it will follow EU sanctions. Several other super yachts, belonging to other sanctioned oligarchs, have been seized or detained in ports in France and Italy.

Shortly after the Russian invasion, Mr Abramovich put his Chelsea soccer club up for sale. First bids are expected Friday, but UK sanctions prohibit him from benefiting from any proceeds from a sale. The UK government has granted the club a license to operate normally, with restrictions, while its owner is under sanctions. Mr Abramovich is also prohibited from selling British property he owns.

-Benoit Faucon contributed to this article.

The Wall Street Journal