| 21 May 2024, Tuesday |

Paper Trail in Beirut Explosion Winds Back to London Address Used by Shell Companies

The Globe and Mail

There isn’t much reason to visit 13 John Prince’s St., an unfamous address just a minute’s walk from the Oxford Circus subway station, in the heart of London’s shopping district.

And yet, two investigations – five years apart, and into subjects as divergent as an explosion in Lebanon and unrelated corruption allegations involving a Canadian company – have ended up at the same narrow five-storey red brick building, wedged between a golf store and a makeup school, but just beyond the area that most tourists would ever see.

Experts say the confluence suggests that the address was used by a “network” of shell companies – including some tied to Kremlin insiders, and others to the Moscow-backed regime of Syrian President Bashar al-Assad – that wanted the appearance of legitimacy that comes with a London address while their real business activities went unscrutinized in other parts of the world.

When a stockpile of ammonium nitrate exploded last August some 4,500 kilometres away in the port of Beirut, it left open the mystery of who owned the deadly shipment that was left unattended for almost seven years before the blast that killed more than 200 people and devastated entire neighbourhoods of the Lebanese capital.

Investigators in Lebanon and Britain have now zeroed in a London-listed company called Savaro Ltd. – which has been linked to a trio of Russian-Syrian businessmen – that used 13 John Prince’s St. as one of its contact addresses. A paper trail examined by The Globe and Mail shows that Savaro was the last owner of the ammonium nitrate, after purchasing the mineral from a fertilizer producer in the former Soviet republic of Georgia in July, 2013.

The ammonium nitrate was then loaded onto a decrepit cargo ship whose ownership, like Savaro’s, was intentionally obscured through a series of shell companies. Though the ship’s declared destination was Mozambique, it made an emergency stop in Beirut in November, 2013, where the volatile cargo remained until the explosion.

Curiously, the owners of that 2,750 tonnes of ammonium nitrate never sought to recover their property, the value of which has been estimated at US$700,000.

On paper, Savaro Ltd. – which says it has zero employees, and filed dormant accounts for years both before and after it bought the deadly shipment – was owned at the time by a Cypriot national named Marina Psyllou. Ms. Psyllou has told reporters that she was not the real owner of Savaro, but wouldn’t say who was.

Margaret Hodge, a Labour MP in Britain who heads a cross-party parliamentary committee on combatting corruption, told The Globe that the British government’s Department for Business had launched an inquiry to try and establish who the real owners of Savaro are. She said the company had also been prevented from dissolving itself this year at the request of the Beirut Bar Association. “They’re investigating it. Whether they’ll get anywhere is another issue,” Ms. Hodge said.

There are clues, however, buried in the paperwork filed with Companies House, the online database of companies registered in Britain. In several places in the company’s filings, Savaro named another company called Alpha Commerce as its “presenter” – the legal entity handling its paperwork.

The Globe first visited Alpha Commerce’s office on the fourth floor of 13 John Prince’s St. in 2016. Back then, the investigation was into a company called Multiserv Overseas that had been created at the same address.

While there’s no direct connection between Multiserv Overseas and Savaro – or their alleged activities – other than their shared address, experts say the intrigue swirling through 13 John Prince’s St. suggests the central London location was seen as a good way to add a sheen of legitimacy to companies that otherwise lacked it.

“There’s clearly a nexus of activity where certain trusted partners can go to get a company created,” said Graham Barrow, an expert on shell companies who advises banks and governments on how to combat money laundering. “The networks are efficient for the corrupt and criminal actors that use them.”

Aleksej Strukov, the director of Alpha Commerce, a company that creates shell companies on demand, worked two floors down from Alpha Commerce at another company-creation firm called Omega Group. Mr. Strukov told The Globe in 2016 that he had made a special trip to Moscow for the creation of Multiserv Overseas. He refused to divulge the real owners, however: “I’m afraid you’d have to be standing here with a warrant,” he said.

Mr. Strukov, through a letter from his lawyers, has since denied telling The Globe that he remembers the creation of Multiserv, or that he made a special trip to Moscow for it. The Globe called Alpha Commerce several times last week, and left voicemails, but got no reply.

Multiserv Overseas was later named in Swedish court as being at the centre of an alleged bribery scheme involving Canadian transportation giant Bombardier Inc. and Russian Railways.

Like Savaro, Multiserv used Cyprus-based directors who were, on paper at least, responsible for the management of hundreds of companies. But a Globe and Mail investigation found that Multiserv Overseas – which documents filed in a Swedish court show made tens of millions in profit as the middleman on transactions between Bombardier and Russian Railways, while performing no discernible service – was controlled by associates of former Russian Railways boss Vladimir Yakunin, a long-time ally of Russian President Vladimir Putin.

Bombardier has always denied paying bribes through Multiserv Overseas, but has yet to reveal the results of an internal investigation the company launched into the affair four years ago.

In response to e-mailed questions last week, a Bombardier spokeswoman directed The Globe to a page in the company’s most recent annual report: “Based on information known to the corporation at this time, there is no evidence that suggests a corrupt payment was made or offered to a public official or that any other criminal activity involving Bombardier took place.”

A junior employee of Bombardier Transportation Sweden – a unit of Bombardier Transportation, which last month was acquired by Alstom SA of France – was acquitted of bribery charges by a Swedish court in 2017. Swedish prosecutors are appealing that decision, and at least one other indictment of a former Bombardier executive is expected in connection with the case.

The trail behind Savaro Ltd. also winds in the direction of Moscow. The director of Savaro is named as another shell company, Interstatus Ltd., which itself lists Ms. Psyllou again as the only significant shareholder. However, when Ms. Psyllou signed the company creation documents for Interstatus in April, 2000, the official witness who co-signed the documents was a woman named Fira Tsypouchtanova, who wrote a Moscow address under her name, suggesting the signing was done in the Russian capital.

Savaro also appears to be linked to three other companies that have occasionally used 13 John Prince’s St.: Hesco Engineering and Construction and Alfa Procurement & Machinery Ltd. The firms are controlled by a trio of Russian-Syrian businessmen who are seen as frontmen for Mr. al-Assad’s Moscow-backed regime in Damascus.

Hesco Engineering and the three businessmen – George Haswani and brothers Imad and Mudalal Khuri – have been sanctioned by the U.S. Treasury Department for “providing support to the government of Syria.” The Khuri brothers were specifically sanctioned for “an attempted procurement of ammonium nitrate in late 2013.”

Savaro and the other two companies frequently filed their paperwork in unison, repeatedly submitting documents – signed by Ms. Psyllou and stamped by Interstatus – on the same day. All three have ties to either Alpha Commerce or one of the Omega group of companies in their paperwork, and on June 29, 2011, all three companies changed their inspection addresses to 13 John Prince’s St. from other locations in London.

“This doesn’t happen by accident, three shell companies moving their addresses on the same day,” said Feras Hatoum, a Lebanese filmmaker whose documentaries have revealed the apparent connections between Savaro and the Russian-Syrian businessmen. “The more links you find, the more you can show the companies are run by the same person.”

The connective tissue between the Savaro and Multiserv affairs is the office of Alpha Commerce. In 2017, after Mr. Strukov and his firms were named in The Globe’s report on Multiserv Overseas, Alpha Commerce left 13 John Prince’s St. and moved to Potters Bar, a town of 20,000 people just north of London.

The Potters Bar address – Suite 2B, 175 Darkes Lane – has since been named in more than 100 reports of suspicious financial activity compiled by the U.S. Treasury, which were leaked to the media last year, leading the BBC to label Suite 2B “one of the dodgiest addresses in the world.”

While Alpha Commerce presents itself as a British company that creates companies for anyone who asks, a large number of its clients appear to hail from Russia and other republics of the former Soviet Union.

Alpha Commerce itself appears to have a direct link to Russia. The company registration number assigned to it by Companies House is also used by a Moscow law firm, Advokatorium, which says on its website that Alpha Commerce is “our location in the U.K.”

Valerii Krasavtcev, a legal aide at Advokatorium, said the firm could not answer questions about its relationship to Alpha Commerce because it was “confidential information.” He gave the same answer when asked about Advokatorium’s relationship to Savaro and the other companies created by Alpha Commerce. Mr. Krasavtcev said that Mr. Strukov was not an employee of Advokatorium.

None of that will help those in Lebanon looking for answers. “I have doubts that in Britain or in Russia or in other countries there is any will to let the Lebanese people know the truth,” said Mr. Hatoum, the documentary filmmaker. “Tell us: Who owns Savaro? Who owns Interstatus? Nobody is willing to give us this information.”

Mr. Barrow said that the network of shell companies operating out of 13 John Prince’s St. and the other address affiliated with Alpha Commerce and Omega Direct was created to make it as difficult as possible to determine the real owners of the various companies that use the services of Alpha and Omega.

“The complexity is baked in,” said Mr. Barrow, the shell company expert. But when it came to the links between Savaro, Hesco Engineering and Alfa Procurement, he said, it was difficult not to see a pattern in how they were operated. “There’s a point at which it’s, how many coincidences can there be?


Source: The Globe and Mail

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