A seven-slide presentation, seen for the first time, shows how Banks – the main donor behind Leave.EU – was offered the chance of making potentially enormous profits in a deal featuring a Russian gold company.
The offer was made through Alexander Yakovenko, Russia’s ambassador in London.
Some MPs have said it raises new questions about
Moscow’s role in Brexit, and whether the Kremlin sought to enrich leading Brexit campaigners in the run-up to the 2016 referendum via a series of covert business deals.
Banks has consistently
denied receiving money from Russia, but the source of his wealth has been under scrutiny since he gave £9m to Leave.EU, the largest political donation in British history.
Leave.EU is currently appealing against a
£70,000 fine by the Electoral Commission in connection with campaign spending offences.
Though Banks consistently downplayed his contacts with senior Russians before and after the referendum, in recent weeks he has been forced to concede there were a number of meetings – including with Alexander Udod, a diplomat later expelled from the UK for
suspected spying.
Earlier this year
the Observer revealed that in October 2015, Udod invited Banks and his business partner Andy Wigmore to meet the ambassador; they shared a “six-hour boozy lunch” at the ambassador’s Kensington mansion a few weeks later.
During that meeting on 6 November, the Russians discussed with Banks a potential gold deal. Eleven days later Yakovenko introduced Banks to the Moscow businessman
Siman Povarenkin.
The exact details of the offer are revealed for the first time in a document obtained by the
Dossier Center, an investigative unit funded by
Mikhail Khodorkovsky, an exiled critic of Vladimir Putin.
A copy of the presentation,
first published by the Russian website Tsur, is understood to have been circulated to a number of people, including Banks. He ultimately did not invest.
Titled “Russian gold sector consolidation play”, it features photos of shiny gold bars stamped with “Russia” in Cyrillic, next to the Russian flag.
The slides set out how investors could reap huge profits from a possible scheme to streamline Russia’s gold industry. Povarenkin’s Moscow-based company
GeoProMining – which owns mines in Siberia and Armenia – would merge with “six or seven” rival gold firms.
The new $8bn (£6.2bn) super-company would be similar in scale to Russia’s biggest gold producer,
Polyus Gold. Russia, it said, had the “second largest gold ore reserves” in the world. Gold companies could get cheap credit since gold was priced internationally in dollars, the document explained.
The Labour MP Ben Bradshaw has queried in parliament Russia’s involvement in
Brexit. He said these “new revelations beg the question why the Kremlin would offer Mr Banks sweetheart business deals”.
Bradshaw said the government should establish an inquiry, similar to the investigation in the US led by the special prosecutor
Robert Mueller into Russia’s role in subverting the 2016 presidential election. Failing that, it should task the National Crime Agency and the police to investigate.
“Mr Banks has not been fully open about the extent of his dealings with the Russian embassy and the people they put him in touch with,” Bradshaw said.
Banks replied: “No Russian Gold deals, sweet heart or otherwise. A small cabal of anti-Brexit journalists from Ch4, the BBC and Guardian newspaper are engaged in a smear campaign against me.”
He added: “I am glad I backed Brexit along with 17.4m Brits who believed in Britain.”
It has already been reported that
Banks responded positively to the gold offer, discussed with the ambassador over a cup of tea. The following day, 18 November 2015, he is reported to have emailed Povarenkin saying he had “passed [on] the presentation to Andrew Umbers of
Oakwell Capital, a company that I own a substantial stake in”.
He has admitted sharing it with fellow Leave campaigner Jim Mellon, who was copied into an email in which Banks signed off with: “I am very bullish on gold and so keen to take a look!”
The pitch made through the ambassador to Banks spelled out in blunt terms that the deal was backed by powerful Kremlin entities.
Sberbank, a Russian state bank, owned a third of Povarenkin’s company and could therefore give better terms to select investors, the presentation indicated.
The final slide says: “Sberbank Capital (subsidiary of Sberbank which is N1 bank in Russia) is a shareholder in GeoProMining and it leads to certain opportunities not available to others.”
By 2015 Sberbank
was under western sanctions. The bank’s CEO, Herman Gref, is an influential former economics minister. In 2013
Gref had dinner with Donald Trump during his visit to Moscow, praising him afterwards, and Sberbank was a sponsor of Trump’s Miss Universe contest.
Bob Seely, a Conservative MP, said Banks’s links to the Russian state have yet to be fully explained. “What was he offered, when and why? I don’t believe Russian officials offer sweetheart deals for investment to any random individual,” he said.
He added: “Why did they offer this deal to Banks, and were there quid pro quos?”
An investigation by Dossier suggests Yakovenko and Povarenko coordinated their pitch to Banks.
For two years Banks said
he only met the ambassador once. He later admitted to three meetings, revising this to four in
a recent interview with the New York Times. The “gold play” pitch was made the same week as Leave.EU’s launch.
Giving evidence to the digital, culture, media and sport select committee, Banks admitted meeting Povarenkin and added: “I’m a businessman, why shouldn’t I?” However, he said he had done no deals in Russia.
In fact, Banks seems to have engaged with the offer for several months, according to emails that have already been leaked to the
New York Times.
They suggest that in January 2016 he invited Nick van den Brul, an investment banker and family friend of Wigmore’s, to meet with the ambassador. “I intend to pop in and see the ambassador as well,” Banks wrote, copying in Udod, the alleged spy.
According to the
New York Times, Povarenkin also offered Banks a second opportunity to invest in the diamond company Alrosa. The Russian government was planning to sell off a 10% stake. An adviser to Banks wrote to Povarenkin that Banks’s team had “not forgotten about your Alrosa project”.
Banks said he eventually decided not to take part. But a fund (
OCCO Eastern European Fund), managed by Charlemagne Capital of which Mellon was a shareholder, did invest in Alrosa.
Three weeks after Brexit, the Kremlin sold its stake to a closed group of investors at a discount to the market price, including OCCO, the
New York Times reported. Mellon says the fund was able to participate because it had previously invested in Alrosa back in 2013.
A spokesmen for Mellon said he was not involved at the time in investment decisions and had no management role. Nor was he a beneficiary of OCCO.
Van den Brul confirmed that he briefed Banks and Wigmore in January 2016 on the gold and diamond mining industries in Russia “where I lived for several years”. He said there was “limited follow-up” beyond a notification about the Alrosa IPO. No transaction happened, he said.
Last month Banks
admitted making payments to a government minister in Lesotho weeks before the country reportedly granted him a diamond mining licence. He denies the money was a bribe.
The Dossier investigation uncovered fresh details of a third potentially lucrative offer to Banks, made in April 2016. An intermediary emailed Banks about the possible sale of a goldmine in Conakry, Guinea, in west Africa. Its owner was an “adventurous Russian” who “shares your passion for the yellow metal”, the intermediary wrote.
The Russian was
Ilya Karas, the CEO of the Moscow-based
Farafina Gold Group. Karas was described to Banks as an “inveterate entrepreneur” and “mini-oligarch”.
Karas confirmed he met Banks “in mid-2016”. Karas said he was “seeking capital for exploration” and a possible $3.5m investment to finance the production of two potential gold sites. Banks did not invest, Karas said, adding: “We didn’t have any subsequent communications.”
In April this year, the company floated a plan to hold
an initial coin offering on the Gibraltar stock exchange, featuring “crypto coins nominated in grams of gold”.
The goldmines identified by Povarenkin as possible consolidation targets include Highland Gold, in which the oligarch Roman Abramovich has a 9% minority stake. Highland and another firm Nordgold said they knew nothing of the deal and were never approached.