By Tony Attwood (and his French-English dictionary)
It was back in August that the website Tribal Football came up with the headline “REVEALED: Usmanov ponders selling Arsenal stake and buying into Everton”. It was an article with the usual stuff about Mr Usmanov being “frozen out” of Arsenal, and no mention that he has been given a place in the directors’ box at the club despite not being a director.
Everyone from Arseblog to the Sun ran the story although the Sun cheated by running the reverse story the following day. (Pesky buggers aren’t they?)
By 18th August Mr Usmanov had issued an “emphatic denial” which those who had not run the first story (Express, Mail, ESPN etc) now ran with a fair amount of glee, laughing at the gullible ones who had run the initial commentary. And so another good bit of make-believe bit the dust.
But experienced Usmanov watchers expected more, and now they have got it via an article which has appeared in the the Swiss newspaper Le Temps. This says that Mr Usmanov has moved to Lausanne and is paying his taxes in Switzerland. Obviously the article is in French, but I done my best with it. If I am wrong, I’ll blame the dictionary.
Now this does have an implication for Arsenal, and I will come to that in a moment. But first here is a sentence which gives the tone of Le Temps article…
By domiciling in Switzerland, the Russian billionaire Alisher Usmanov denies hundreds of millions of dollars to the budget of a country whose current account deficit is exploding.
Mr Usmanov, you may recall, made his money through acquiring shares in mines and metallurgical operations that were privatized in the 1990s, and according to the paper now spends “most of his time in Lausanne.”
They make the point that Alisher Usmanov “is the head of the International Fencing Federation (of which he was a champion) and serves as a member of the IOC Commission for the development of the Olympic TV channel. The billionaire is renowned as one of the main sources of Russian influence on the IOC.”
Apparently his press service says that he focuses a lot of his time on “charitable, philanthropic and sports” work. They also note that (and I am still translating from French here) “for these reasons and for reasons of health, he spent fewer than 183 days in Russia in 2015, thus losing his status Russian resident.”
Asked by Le Temps to specify where the billionaire pays its taxes, “the press service of USM Holdings was unable to give a reply by the time the paper went to press…. The Federal Department of Finance cited tax secrecy as a reason not to respond.”
However USM Holdings told the paper that in “recent years, Alisher Usmanov has paid, as an individual, $350 million to the Russian treasury, while the companies in the holding company he controls additionally paid 100 billion roubles ($ 1.6 billion) in 2015.”
The newspaper in Switzerland added that Mr Usmanov has been close to President Vladimir Putin, and has been “inclined to use his financial muscle in the political service to the Kremlin. His media empire includes ten terrestrial channels and most particularly the Kommersant newspaper group, the 2006 takeover of which was accompanied by an editorial change.”
(After the takeover, the paper suggests, criticism of President Putin disappeared). “Two women create an additional link between the two men. The wife of Mr Usmanov’s former coach (Alina Kabaïeva), is herself a former Olympic gymnastics champion, and, the paper suggests, is a friend of the Russian President.”
The issue of Russians heading for Switzerland as the place to pay tax is a matter of interest to those who study such matters. Others who have gone that way include Gennady Timchenko (supposed net worth $11.4 billion), Vyacheslav Kantor ($2.5 billion), Vasily Anisimov ($1.2 billion), and Yuri Chefler ($1.9 billion).
That is interesting because the paper then goes on to say, “Others choose Britain, Monaco, Israel or the United States. There are at least 17 Russian billionaires who have lost (through moving abroad) their tax resident in Russia.”
Now shortly after his third re-election in 2012, President Putin made “fiscal patriotism” one of his central planks of his policy. A law was then passed, forcing the Russians to repatriate capital and declare their assets abroad. However it seems some citizens of Russia are choosing not to do this. Unless of course Mr Usmanov is in Switzerland working with the Olympic committee with the President’s blessing.
So what does all this mean for Arsenal?
If the article in Le Temps is correct, and if my translation is more or less accurate, then Mr Usmanov will be required to remain in Lausanne for much of the year in order to fulfil his residency obligations.
As I understand it resident individuals of Switzerland are taxed on their worldwide income, regardless of the source of the income. So Mr Usmanov is paying tax on his worldwide earnings in Switzerland, and he most certainly won’t want to pay it again in any other jurisdiction. He obviously thinks that the Swiss tax level is a decent one for him, and as noted above he’s working for the Olympics.
All of which makes it look as if Arsenal, and England, are not really on his mind. That doesn’t mean he is about to sell his shares – after all he is hardly short of a Swiss Franc or three – but it does mean that he seems to have given up thoughts of buying Arsenal from Stan Kronke or trying to influence the club by investing his fortune in it.
In which case not only was the whole Everton story a load of invented bunkum [goodness me I have never known such a thing before – the media making things up!!!] but really he is not much in the game, as far as Arsenal is concerned.
He might put his shares up for sale bit by bit; he might even donate them to the now defunct Fanshare scheme which had to call it a day because there were not enough shares to buy on behalf of fans. Those of us in the scheme all got our money back. Or he might offer them to Silent Stan.
But overall I think it is worth taking future tales about Mr Usmanov and English football with a fair degree of caution – at least until the shares start being transferred or at least offered.
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