Roman Abramovich’s investment vehicle changed hands shortly after Russia invaded Ukraine


Hours after Russia invaded Ukraine, control of an investment vehicle long linked in public documents to oligarch Roman Abramovich and used to own stakes in renewable energy startups and of technology in the United States, the United Kingdom and Israel has been transferred to one of its business associates, according to the securities filings.

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

Since that decision, the United Kingdom and the European Union have sanctioned Abramovich, accusing him of benefiting from the regime of Russian President Vladimir Putin. The sanctions subject Abramovich to asset freezes and UK and EU travel bans.

Links to public repositories
A person close to Davidovich confirmed to have taken control of the entity. Davidovich’s investment in Norma “is part of his overall investments and interest in the startup industry,” the person said. This person said Abramovich was not Norma’s previous owner, but did not identify who it was. Norma is linked to Abramovich in several public repositories. For example, 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 Abramovich. A company filed in 2020 on the London Stock Exchange by AFC Energy, a British fuel cell company, also listed Abramovich as an indirect investor in the company “through Norma Investments Limited”.

Filings show that the pair frequently invest in businesses together. Davidovich is listed in some documents as the managing director of Millhouse, a Moscow-based investment firm that Abramovich set up two decades ago.
Norma’s change in control comes amid a broader effort by the Russian billionaire to shed or move assets in recent weeks, after Western governments threatened to dismantle an empire Abramovich has built since the 1990s in because of what they say are ties to Putin and the war in Ukraine. London, Brussels and Washington have all threatened to crack down on a group of wealthy Russian billionaires like Abramovich in hopes of putting 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 avoid asset freezes and retain indirect control of assets without technically fall under sanctions. The British Virgin Islands, a British Overseas Territory where many of Abramovich’s companies are registered, must enforce British sanctions orders. Davidovitch is not sanctioned. British documents indicate that he mainly resides in Israel.

Before being sanctioned in the UK, Abramovich sought to sell his 15-bedroom London mansion and football club Chelsea FC. He also attempted to exit US funds, the Wall Street Journal previously reported. Two of its mega-yachts recently left ports that may come under EU jurisdiction, according to ship tracking sites.

The complex ownership structure of Norma Investments underscores the challenge facing UK, US and European officials as they attempt to determine which sanctioned assets control the oligarchs. UK officials say that once sanctions are in place, assets controlled by those sanctioned are frozen. The EU, US and UK began sanctioning family members of oligarchs in part to capture transfers that may have taken place before.

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

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

Freeze of assets
Many governments have the power to temporarily freeze the assets of individuals or entities under their jurisdiction, without proof of criminality, through sanctions or other measures. Owners are generally prohibited from selling or benefiting from them until sanctions are lifted or successfully challenged. However, governments generally cannot take ownership of assets except after lengthy legal proceedings that would require proof of breach of law. The UK government, however, is considering laws that would give it the power to seize sanctioned assets.

By sanctioning Abramovich, the British government said he had benefited from Putin’s regime. Once a frequent visitor to London, he has not been seen here in recent years. He listed his address as Russia in a recent company file.

Shortly after the Russian invasion, Abramovich put his Chelsea football club up for sale. The first offers are expected soon, but British sanctions prohibit it from benefiting from the proceeds of a sale. The UK government has granted the club a license to operate normally, with restrictions, while its owner is under sanctions. Abramovich is also prohibited from selling the British property he owns.

Excerpt from the Wall Street Journal

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