oDR

The strange connections of Tashkent City’s “British investor”

Questions emerge over a Scottish limited partnership linked to a major urban redevelopment project in Uzbekistan, including the global corporate network it is connected to. 

openDemocracy investigations
21 February 2019
Screen_Shot_2018-12-17_at_12.28.10 (1)_0.png

Design for the new Tashkent City project from above. Source: Tashkent City. Corso Solutions LP appears to be an unusual property developer. The Edinburgh-registered company has no website, no contact details and no obvious business activity. And yet it was named last autumn as a foreign investor on the Tashkent City project, a giant property redevelopment in the centre of Uzbekistan’s capital. openDemocracy has found that Corso Solutions has connections to an opaque international network that provides company formation services, including to apparent money laundering vehicles.

Tashkent City, a $1.3bn project to construct a series of shopping malls, parks, luxury apartments and business centres in the capital, is part of President Shavkat Mirziyoyev’s plan to rebrand Uzbekistan as investor-friendly, modern and open for western capital. Under the former president, Islam Karimov, who ruled the country until his death in summer 2016, the country was plagued by high-level corruption and offshore schemes, and foreign investors were found to have entered into shady deals.

Last December, an openDemocracy investigation revealed that one of the three foreign investors in Tashkent City, German company Hyper Partners GmbH, appears to be hiding its real beneficial owners behind several layers of corporate ownership. On the basis of Hyper Partners’ corporate linkages and shareholder information, we suggested that several of the company’s owners could be a group of Uighur businessmen from Kazakhstan and Xinjiang, China – and that the sources of Hyper Partners’ and related companies funds should be audited.  

Screen Shot 2019-02-05 at 12.28.06_0.png

Tashkent City Press Conference, 31 January. Source: BBC Uzbek / YouTube.

Responding last month to our reporting on Hyper Partners, the mayor of Tashkent said at a press conference:

“It’s not within our competencies to ask who is investing, where their money is from, how funds have travelled through the banking system. The most important thing is that the project is being implemented, the most important thing is that a foreign company is investing in our market.”

According to Tashkent City Project Administration, all decisions on investors are taken by an administrative board, which comprises the prime minister of Uzbekistan, the mayor of Tashkent and other ministerial representatives. 

Now we have found that the directors of Corso Solutions appear to be employed by an international company formation business which has connections to businesses linked to money-laundering activities. These activities raise further questions about the nature of foreign investment in Tashkent City – and which investors the Uzbek government is choosing to work with.

Edinburgh backstreet

Corso Solutions LP was registered as a Scottish Limited Partnership in Edinburgh in May 2017, with its legal address at 101 Rose Street South Lane — and £99 in initial capital. 

Located in a tiny backstreet in Scotland’s capital, 101 Rose Street South Lane is legally home to 1,653 companies according to the OpenCorporates database. “This address in Edinburgh is is used as a proxy address,” says financial crime consultant Graham Barrow.

According to the UK companies registry, Corso Solutions has not logged any activity or accounts since its formation. As reported by Scottish newspaper The Herald, the company should have disclosed its beneficial owner (“Person of Significant Control”) after new UK legislation on Scottish Limited Partnerships came into force in 2017. Concerns about this situation were raised in September last year. 

In their 2017 report “Offshore in the UK”, anti-corruption campaigners Transparency International and Bellingcat, a team of investigative journalists, stated that the “minimal filing requirements” and “perceived respectability” associated with Scottish Limited Partnerships are “increasingly being abused by money launderers”. In October 2018, The Herald reported on the use of SLPs as investment vehicles in multi-million-dollar industrial and cotton projects in Uzbekistan.

Screen Shot 2019-02-20 at 12.59.01.png

Excerpt from a September 2018 report

by Podrobno.uz, which names Corso Solutions LP as a foreign investor alongside Hyper Partners GmbH. Corso Solutions was first mentioned in a September 2018 report by Uzbek media on investors in Tashkent City. Since then, we have been unable to find any information on the exact nature of Corso Solutions’ investment, and it is not mentioned on Tashkent City’s official website. When Radio Ozodlik contacted Tashkent City in October 2018 regarding Corso Solutions, an official responsible for foreign investment stated that information on approved foreign investors, including Corso Solutions, was a “commercial secret”. When we contacted Tashkent City project administration to confirm Corso Solutions’ role in the project in January and February 2019, we received no response.

According to Graham Barrow, the lack of transparency over Corso Solutions’ beneficial owner in the filings immediately raises red flags.

“Corso Solutions LP are in breach of several UK requirements and subject to a penalty of up to two years in prison, a fine or both. But who would they arrest or fine? The company has failed to comply with the requirement to list people with significant control.”

Meet Mr Charyev

Corso Solutions LP has two registered partners: Indian citizens Deepak Devidas Shetty, a general partner, and Arasakumar Jayaraman, a limited partner. Searching the UK companies database, Jayaraman and Shetty appear as directors of numerous limited companies, which appear to form a constellation of “mailbox” companies together with Corso Solutions.

Both men appear listed as directors for companies that either have connections to or were set up by a Russian citizen, Viacheslav Charyev, who is director of an international company formation network.  

Screen Shot 2018-12-21 at 10.20.32_0.png

Project design for Tashkent City's Lot 3, a shopping centre with two 30-storey buildings. Source: Tashkent City. For example, Shetty replaced Charyev as director of Winlinebet Ltd last June. In November, Shetty signed off on 2017-2018 accounts for DDD Media LLP (registered at the same address as Winelinebet) on behalf of Sterling Legal Payment Services, one of two UK businesses run by Charyev. In a similar vein, Jayaraman is listed as a director for a UK limited company, Aveia Ltd, where he replaced Charyev as director in May 2017.

Two London addresses, 91 Battersea Park Road and 507 Green Lanes, are the hubs where most of the companies linked to Charyev, Jayaraman and Shetty are registered. Both addresses have hosted Charyev’s company Sterling Legal Payment Services.

As we show below, Viacheslav Charyev runs a network of on- and offshore companies, hidden behind opaque networks, and which are registered in locations from the Seychelles to Belize, Hong Kong to New Zealand.

The question is: whoever Corso Solutions’ real owner is, why does the investor require this kind of opacity? What are the connections that Charyev has established across the globe?

The Sterling network

Viacheslav Charyev has many associates who assist him in company formation in different locations. In 2016, he sought to hire an Indian national to serve as a “nominal director” of numerous companies registered in Russia, for a fee of $50 per company.

Screen Shot 2019-02-19 at 15.09.24.png

Screen shot from advert on GoAdIndia.com, posted in 2016. Ads like the one shown above were posted on various online job forums. Coincidentally, the dates of posting match the beginning of the cooperation between Charyev-linked businesses and Deepak Shetty and Arasakumar Jayaraman, who went on to act as partners for Corso Solutions.

“It’s a reasonable inference that Deepak Shetty and Arasakumar Jayaraman are among the India-based nominee directors Charyev was advertising for in 2016,” said Richard Smith, who researches companies involved in money-laundering schemes. “In the following years, both Shetty and Jayaraman took up many more director appointments at companies at the 507 Green Lanes address, which is exactly what you’d expect nominee directors to do.”

Charyev’s worldwide network is easily recognisable: his companies have similar names, usually involving the word “Sterling”, and Charyev’s own directorship and ownership. For example, we found that a Czech company, Sterling Legal Services s.r.o. registered in 2017 with CZK 10,000 (€384) capital, was one of the most active among Charyev’s businesses. There is also a Hong Kong-registered Sterling Legal Payment Services, and a now deregistered Australian company of the same name.

In Russia, Charyev is the registered director of three businesses, which include two active companies registered with the same name (OOO Sterling – registered in 2011 and 2014 respectively) but at different Moscow addresses.

On his Russian website, Charyev offers company and bank account formation across several dozen countries, including jurisdictions such as Belize, the British Virgin Islands, Cyprus and Seychelles.

Clearing an apartment block to make way for Tashkent City. Source: Atkhan Akhmedov. According to this website, registering a Scottish LP costs $3,100. With this service, Charyev offers Sterling’s services, which entail “tax-saving and full legal compliance at the same time”, and with a core value of “compliance”.

According to the Russian companies registry, one of the two Sterling branches has been subject to seven tax enforcement proceedings. These proceedings could not be settled because the Russian authorities were unable to locate the owner. As noted in the Russian company registry, Sterling’s registered Russian address (Luchnikov Lane 7/4, Moscow) is a known hub for Russian mailbox companies. The second Russian Sterling company was also involved in a similar proceeding.

What sort of company uses the services of Sterling Legal Services?

Proximity to money laundering

In Latvian bank accounts for Sterling Legal Services seen by openDemocracy, we found dozens of payments for company formation and legal services performed by Charyev’s company between 2013 and 2015.

The transactions show that this is only one of several accounts linked to Charyev and the Sterling network of companies. One of these accounts shows a turnover of $270,000 over two years.

We asked UK financial crime consultant Graham Barrow to examine the accounts, and the UK limited liability partnerships (LLPs) that are recorded as paying Sterling Legal Services for company formation and legal services.  

“LLPs have been central to all the major previous laundromats (Russian, Azerbaijani, Moldovan, Danske Bank), so when I see a lot of them connected to a single company, I want to take a closer look.”

PA-39447475.jpg

Danske Bank is currently under investigation over 200 billion euros in payments from Russia and post-Soviet states that were found to have flowed through its Estonian branch. (c) Christian Charisius/DPA/PA Images. All rights reserved. Barrow points out that two of the UK limited partnerships which paid Sterling Legal for services, Grandburg Ventures LLP and Townstreet Complex LLP, are registered to the same UK address: 175 Darkes Lane, Potters Bar, Hertfordshire. “This address has been one of the most prolific providers of LLPs to laundromats and other money-laundering schemes,” said Barrow. According to Transparency International, this address hosted a company used in the $2.9 billion Azerbaijani laundromat. In 2018, the BBC “calculated that $1.7bn has been laundered through companies registered at [this] single address”.

The 2014-2015 accounts for Grandburg Ventures LLP (now dissolved) were signed off by Ali Moulaye, a Brussels-based dentist. Buzzfeed reported last August that Moulaye had supplied the paperwork for a network of 127 British shell companies, “around a third of [which] face allegations – some in criminal courts – of large-scale tax evasion, fraud, or corruption”.

From London to New Zealand

A second group of three UK limited partnerships (Alpha-M LLP, Alsical CIS LLP and Isomag UK LLP) identified as making payments for legal services in Sterling’s accounts is or has been registered at 91 Battersea Park Road and 507 Green Lanes – the same London addresses as a number of companies which list (or have listed) Viacheslav Charyev, Deepak Shetty and Arasakumar Jayaraman as directors. Alpha-M LLP lists a Seychelles-registered Sterling Legal Services as a corporate member.

The other two UK limited partnerships (Alsical CIS LLP and Isomag UK LLP) previously included a New Zealand limited liability company, Steel Refractory Limited, as a corporate member. At the incorporation stage for both partnerships in 2011, Steel Refractory Limited was represented by a director, Angelique Elizabeth Lilley.

Previously, the Organized Crime and Corruption Reporting Project found that Angelique Elizabeth Lilley has acted as a nominee director at a holding company for Moldovan television channel Publika TV, and a director at a company involved in the 2013 ownership battle over Ukrainian television channel TVi.

According to research by Naked Capitalism, a blog run by Richard Smith, Lilley has worked for Ian Taylor, who ran a New Zealand-based company formation business, the GT Group.

OCCRP and the International Consortium of Investigative Journalists report that the GT Group has set up offshore corporate networks used by Russian organised crime, Hezbollah and the Mexican Sinaloa drug cartel to launder funds and hide ownership. Companies House records that Ian Taylor has been disqualified as acting as a company director until 2021 under section 6 of the Company Directors Disqualification Act 1986 (Duty of court to disqualify unfit directors of insolvent companies).

According to the financial information website interest.co.nz, by last December New Zealand police had received more than 350 criminal investigation inquiries from abroad about companies created by Taylor.

In this regard, suspicion arises when we examine the 14 companies that Arasakumar Jayaraman, limited partner for Corso Solutions, was previously or is currently listed as director of.

For example, Jayaraman was succeeded in five companies (Ultrapaymax Ltd, Globalwinmax Ltd, Siampay Ltd, Choice Trade (International) Ltd, Victory Lotter Ltd) by Vanuatu citizen Leah Toureleo. At two of the companies, Jayaraman was replaced by Toureleo on the same day, 29 November 2017.

In 2014-2015, Leah Toureleo’s name emerged in the context of the OCCRP investigation into the “Russian laundromat”, which laundered billions of dollars in Russian money stolen from the government or earned via organised crime activity. Naked Capitalism found that Toureleo was registered as a director of New Zealand company Chester NZ Limited, which received billions of roubles in illegal payments from Moldova’s Molincondbank. According to Naked Capitalism, Toureleo acts as a proxy director for the GT Group.

The Latvian bank accounts also show that Hong Kong-based company Nordfield Export Limited paid Sterling $6,600 for legal services in February 2015. In January 2018, the National Anti-Corruption Bureau of Ukraine (NABU) identified a company with the same name as one of several that transferred $674,000 out of a corrupt tender scheme at the country’s Berdyansk and Mariupol ports in 2015. A search on OpenCorporates’ database of companies reports only one registered under the name “Nordfield Export Limited”. According to Ukrainian court documents, the NABU investigation found that this scheme, which centred around the management of the Ukrainian Sea Ports Authority state company, was launched in January to February 2015.

“Having reviewed these bank statements,” Graham Barrow told us, “they clearly exhibit connections to other significant laundromats.”

This background to Corso Solutions, one of the much-trumpeted foreign investors in Tashkent City, raises questions about the funds and expertise being deployed in this mammoth urban development, the reality of Uzbekistan’s new “open” and transparent economy, and the continuing lack of enforcement of new UK legislation designed to identify “persons of significant control” at Scottish LPs.

We contacted Tashkent City Project Administration, Corso Solutions LP and OOO Sterling for comment, but did not receive a response. You can contact us at media@opendemocracy.net.

 

Comments

We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram