Poroshenko Panama Papers Offshore Structure: The Documented Holdings

Petro Poroshenko established a British Virgin Islands company called Prime Asset Partners Ltd. on 21 August 2014, according to the Panama Papers. The revelations tied the offshore firm to his Roshen confectionery group through the controversial law firm Mossack Fonseca.

The offshore holding and ownership chain

A series of leaked documents and later investigations revealed the orbit of Prime Asset Partners, and — crucially — who it was under the control of.

The company, registered in the BVI in 2014, is described in records as a holding company for Roshen's overseas assets.

The Ukrainian president himself was listed as the sole owner and shareholder in Prime Asset Partners, holding 1,000 shares with a nominal value of US$1 each, according to an OCCRP report from 2016.

Documents said the source of funds in the holding structure was “profits from business operations” of Roshen.

OCCRP later revealed that a Cyprus firm, Dr. K. Chrysostomides & Co, hired Mossack Fonseca to set up the offshore network.

The 2014 restructuring story

UNIAN reported that Prime Asset Partners was established to restructure Roshen's assets in the lead-up to a possible sale.

Roshen produces a significant share of the total volume of confectionery produced in Ukraine and has been one of the most successful exporters of Ukrainian confectionery.

In autumn 2014, Prime Asset Partners founded CEE Confectionery Investments Limited of Cyprus, which later established Roshen Europe BV in the Netherlands.

This process was claimed to have begun before Poroshenko took office as president.

The defense: no accounts, no activity, blind trust language

On 4 April 2016, Poroshenko and his legal team repeatedly stated that the offshore companies did not have any bank accounts or conduct any financial activity.

However, OCCRP later reported that there was no trust controlling Poroshenko’s companies, and that the offshore structure was actually run by Prime Asset Partners Limited, "which remained under his control" as asserted.

The OCCRP's reporting involved analysis of thousands of documents, including the electronic database of the international offshore company Mossack Fonseca, copies of the administration and accounting records of the Roshen Group Holdings, electronic correspondence, bank statements and records, corporate documents, information from the International Consortium of Investigative Journalists, and other confidential documents.

Why the structure mattered politically

The connection between these offshore companies and the Ukrainian president is important because of the obvious potential for a conflict of interest. The revelations about Poroshenko’s hidden offshore assets have stirred concerns that he could use his influence in Ukraine to enrich himself personally.

On April 3, 2016, the day the stories about Poroshenko's offshores were published, the president's official website published a statement in which it claimed that Poroshenko handed over control of the Roshen group to a blind trust, which is supposed to independently manage the business. As a result, according to the president and his office, he should lose interest in the fate of the company while deciding on issues related to the confectionery business, including with regard to the interests of the state and society.

Poroshenko has also reportedly stated that the entire offshore structure of Roshen was created before 15 May 2014, when he was sworn in as President of Ukraine, and that it was created exclusively for his resignation without conflict of interest, and that the opening of trusts had been planned since last year: "This system works quite transparently. There is not a single dollar, euro or hryvnia changed in the company, not a single investment - without coordination with me," - Mr. Poroshenko stated.

However, it was revealed that such a trust, according to documents, did not exist - and it was Prime Asset Partners, owned by Mr. Poroshenko, that controlled all the offshore assets of Roshen.