Abramovich in police probe

WHEN French investigators call on billionaires on the Cote d'Azur, they do it in style. But when a helicopter full of armed and masked police landed on the lawn of a luxury villa rented by UK-based Russian billionaire Boris Berezovsky last month, only his mother was there to greet them.

By all accounts, their search for incriminating evidence of money-laundering turned up little of interest, and the officers took off glum with disappointment.

Berezovsky, a friend and former business associate of Chelsea Football Club owner Roman Abramovich, was not amused. He fled Russia after incurring the wrath of Russian President Vladamir Putin and says the raid was entirely politically motivated. 'What lies behind all of this activity is political persecution of me by the Russian administration,' he says. 'The British authorities have granted me political asylum to protect me from this persecution and I am surprised that the French authorities continue to support the Russian authorities in this way.'

Companies linked to Berezovsky and Abramovich are among those under investigation in a massive French inquiry into Russian investments in France that is designed to catch and prosecute any Russian investor guilty of money laundering.

Acting on information from two national financial investigation units, Marseille-based investigating magistrate Beatrice Del Volgo, under the supervision of the Marseille Public Prosecutor, is understood to be examining the purchase of a villa once owned by Greek billionaire Aristotle Onassis near Antibes, on the Cote d'Azur, and since bought by Abramovich, as well as the ownership of the two properties nearby rented by Berezovsky, who says he has not lived in the Cote d'Azur properties for four years.

A senior French legal source confirmed that the authorities are pursuing a wide-ranging inquiry into Russian corporate investments in France. 'We are looking at whether there has been money-laundering,' the source said. 'To qualify as money laundering, the money would have to have been obtained by a crime or other violation, as defined by Russian law.'

Del Volgo, who declined to discuss the inquiry, is reported to have visited Moscow last year in an effort to track Russian companies and their investments in France. One of the biggest challenges, the source said, is to establish whether money used to fund Russian investments in France had been gained legally. Only if it was obtained in breach of Russian laws would French investments be punishable under tough French money-laundering prohibitions.

Abramovich, who has also denied any wrongdoing, is reported to have hired one of France's most celebrated defence lawyers, Olivier Metzner, to advise him. Metzner, of Paris-based Metzner et Associes, defended two of those charged in a corruption scandal at French oil giant Elf, as well as acting for Jean-Marie Messier, the former boss of global media group Vivendi Universal. Metzner did not return calls.

Abramovich is understood to be fed up that because of his high-public profile - after Indian-born steel magnate Lakshmi Mittal, he is Britain's richest man with a fortune estimated last year at £7.5bn - his name has become public in an inquiry that touches investments by dozens of his countrymen. His spokesman, John Mann, said: 'Any check into Abramovich's property would only confirm that his assets were purchased legally and above board.'

{2}The money to purchase the chateau owned by Abramovich attracted the attention of French authorities because it came from Cyprus, but it is understood that he has placed his investments in trusts, some of them in Cyprus. Mann said Abramovich had established the trusts there to ensure there was no conflict of interest with his role as an elected official in Russia.

According to French reports, the inquiry involving him relates to his ownership of the luxurious Chateau de Croé near Antibes, on the Mediterranean coast of France, and was triggered by information from the French Finance Ministry's money-laundering inquiry unit, known as Tracfin, provided in 2002. Tracfin is a special 50-strong body, comprising lawyers, accountants, customs officers, police and Ministry of Defence agents, run within the French Finance Ministry to examine the statutory declarations of companies and corporate officers in France.

By law, any company or individual who suspects a deal might involve money illegally gained is required to report it. Cases where wrongdoing is suspected are passed to magistrates for investigation. In February 2003, it signed a co-operation agreement with its Russian counterpart, FSFM.

Tracfin works closely with another special investigations unit within the Police Nationale, the Office Central pour la Répression de la Grande Délinquance Financière (OCRGDF). It was the OCRGDF that provided information for the separate investigation, also overseen by Del Volgo, involving two properties rented by Berezovsky.

Of the two inquiries, that involving Berezovsky is viewed by French experts as being the more serious. In 1996 and 1997, a French company called SIFI bought the chateau of La Garoupe on the Côte d'Azur for Ffr55m (£5.5m) and neighbouring Clocher de la Garoupe for Ffr90m. SIFI is reportedly controlled by Ovago, a Swiss company. One report says Ovago largely financed the purchase and maintenance of the properties rented by Berezovsky.

In addition, according to French newspaper Le Figaro, Ffr85m of the money used to buy these properties was guaranteed by Sibneft, a Russian oil company controlled by Abramovich.

Mann says that is plain wrong. ' Sibneft has not received notice that the company is the subject of any investigation,' he says. 'Furthermore, Sibneft has never provided any financial guarantees for the purchase of the property in question. The company and Mr Abramovich had no involvement in this transaction. Neither Sibneft nor Mr Abramovich currently has any relationship with the central subject of this investigation.'

Yet although SIFI sold Clocher de la Garoupe in 2001, in January, SIFI and Jean-Louis Bordes, a Côte d'Azur estate agent who is a director of SIFI face charges of 'repeated money-laundering' and fraud.

But the various inquiries into Russian investments have now been rumbling on for at least two years. And both the Marseilles prosecutor and the investigating magistrate are clearly some way from reaching definitive conclusions.

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FREE SPENDERS WHO FOCUS ON PROPERTY

ROMAN Abramovich's purchase of Chelsea Football Club in 2003 for £250m would not ultimately have been possible without the help of his old mentor and former business associate, Boris Berezovsky.

It was their joint friendship with Tanya Yeltsin, daughter of former Russian President Boris Yeltsin, that opened the door for them to participate in Russia's privatisation of public assets in the 1990s. Teaming up, they acquired controlling interests in a string of oil and gas assets that they built into Russia's second-largest oil company, Sibneft.

That eventually made Abramovich's £7.5bn fortune but Berezovsky, who won political asylum in Britain in 2003 after a bitter falling-out with Russian President Vladimir Putin, is no pauper either.

To help secure their wealth, Berezovsky and Abramovich have spent freely on a series of properties, leading a charge by wealthy Russians that is propelling a boom at the top end of the London property market. Abramovich is routinely linked to virtually every landmark property that comes on to the market in the South-East.

In fact, in Britain, he has spent a reported £12m on a 450-acre estate at Fyning Hill, West Sussex, which he shares with his wife Irina and their five children. The family also has a £28m six-storey mansion in Knightsbridge.

Berezovsky, said to be worth a mere £2bn, owns a £10m Chelsea house, a Belgravia flat and a house on Surrey's Wentworth Estate. Last month he added the 172-acre Hascombe Court estate in Godalming to his portfolio, buying it from TV producer and former DJ Chris Evans for £10m.