Russian businessman Oleg Tinkov faces extradition to the United States. US tax authorities accuse him of tax evasion, according to experts, in the amount of about $ 40 million. It is unlikely to evade extradition. Moreover, shares held by Mr. Tinkoff may be seized, experts point out.
On Monday, March 2, TCS Group announced that Oleg Tinkov would remain in London during a lawsuit initiated by the United States Tax Service (IRS). As indicated in the materials of the group, the hearing (will last until April) is a response to allegations of understating tax reporting for the US Internal Revenue Service against Mr. Tinkoff. After issuing a warrant for his detention, the businessman was released on bail. According to the Daily Express, it was £ 20 million.
Oleg Tinkov takes part in the hearings as a private person, this situation cannot affect the companies of the group: Tinkoff Bank, Tinkoff Insurance and Tinkoff Mobile, the TCS Group said in a statement.
They emphasized that Oleg Tinkov has not been a U.S. citizen since 2013. Earlier, the British tabloid Sunday Express published an article stating that the US prosecutor’s office issued a preliminary arrest warrant for Oleg Tinkov and that now a businessman in London “disputes extradition to the United States.”
Experts assess Mr. Tinkov’s prospects not very positively. “The deliberate provision of false information when submitting a tax return falls into the category of tax evasion and threatens the taxpayer with additional taxes, fines for arrears, and also, importantly, criminal prosecution,” says Vlad O2 Consulting Senior Consultant Vlad Burilov. According to Mikhail Begunov, managing partner of Tax Compliance Law Firm, “the issued arrest warrant indicates the sufficiency of the evidence in the commission of the alleged crime and the desire to extradite the person to the United States for legal proceedings.” According to Andrei Gusev, managing partner of Borenius in Russia, if the London court meets the requirements of the IRS, Mr. Tinkov may be extradited by the United States, especially given that America has the strongest extradition potential.
Until the IRS claims have been announced, it’s too early to talk about the potential consequences for Mr. Tinkov’s entire business, Ekaterina Boldinova, partner at Five Stones Consulting Law Firm, points out. However, according to Mr. Burilov, the transfer of the case to the criminal plane can significantly affect the group’s activities in terms of meeting the standards for listed public companies if corporate Mr. Tinkov is significantly associated with the group (through offshore he owns 87% of the voting shares of TCS Group).
According to Alena Bachinskaya, an adviser to S&K Vertical Law Office, the amount of the deposit may indicate the seriousness of the US request for extradition, a large amount of claims comparable to at least the amount of the deposit.
According to Stanislav Lyaptsev, deputy head of the business structuring practice of KSK groups, based on the size of the pledge, it can be assumed that we can talk not only about a fine, but also about imprisonment. “2013 is the year TCS entered IPO. Oleg Tinkov himself earned about $ 200 million on this IPO (according to Forbes estimates), he said. Considering that in 2013, Mr. Tinkov renounced his US citizenship, he had to pay tax upon withdrawal taking into account the value of assets on the date of cancellation citizenship. After entering the IPO, the value of the shares increased. If Oleg Tinkov remained a US citizen at this date, he would have additionally paid a capital gains tax. It could be up to $ 40 million (given the capital gains tax of 20% of the amount earned). " A similar case was with Facebook co-founder Eduardo Saverin, who renounced his U.S. citizenship before entering an IPO in order to save on taxes (about $ 600 million), he recalls. In the most negative scenario, the IRS may seize shares held by Mr. Tinkoff, continues Mr. Lyaptsev.
Against the background of the US tax claims against Oleg Tinkov on the London Stock Exchange, TCS Group shares lost 6.85% on Monday.
Previously, TCS Group shares had already experienced sharp drops, and then Mr. Tinkov bought up part of previously placed shares. According to Kommersant in the TCS Bank, now there are no such plans. “In general, there is a volatility in the price of stocks and markets due to the coronavirus,” they noted there. “Moreover, our securities are now experiencing a reverse movement. Oleg Tinkov himself did not answer Kommersant on an affordable mobile phone and on requests on social networks.