Andrei Kostin, the head of VTB, is connected to a network of offshore companies that own real estate in Russia and Europe, as well as other assets valued at over $100 million.
Andrey Kostin, the head of the state-controlled bank VTB, is wealthy. He revealed his income in 2014, stating he had earned 240 million rubles. Kostin strongly denied Forbes' calculation of his $37 million income, calling it “complete nonsense.”
This statement of the state banker turned out to be true: thirty million dollars is nothing compared to assets worth a hundred million. “Important Stories” publishes an investigation by the Center for Corruption and Organized Crime Research (OCCRP) about the head of VTB's relationship with offshore firms holding property worth more than $100 million. The assets include houses, premium apartments, investment companies, and an expensive hotel in Austria. These properties were controlled through an offshore network run by Costin’s confidant, Eric White, the son of a prominent Canadian communist.
With communist greetings
Canadian citizen Eric White is mentioned in the Pandora Archive documents, materials from the largest offshore company registrars around the world, which were made available to journalists by OCCRP and the International Consortium of Investigative Journalists (ICIJ) in 2021. The documents list White as the actual owner of companies established in the British Virgin Islands, which in turn owned firms primarily in Cyprus, holding luxury real estate in Russia and Europe. This network was used, in part, in the interests of VTB head Andrey Kostin. His acquaintance confirmed to Important Stories that Eric White is Kostin’s confidant in terms of managing and owning property.
Network of companies associated with Eric White
The son of Canadian communist Burt White, Eric moved to the Soviet Union as a boy in 1966 and was educated at the Interdom boarding school for children of foreign communist leaders. There are few publicly available details about his life. His late father's memoirs provide only a glimpse of his birth. After leaving school in 1973, White Jr. stayed in Russia to study history at Moscow State University, then moved to Canada and went into business.
Eric White is not a public figure. Most information about him is related to Interdom. His education at this boarding school appears to have greatly influenced his life. The school's website features an interview with White from 2010, in which he talked briefly about himself.
Eric White at the meeting of Interdom alumni
“My father was a correspondent for a Canadian communist newspaper accredited in Moscow. Now I work in business in Russia and Cyprus. <…> I believe that any country claiming to be a world power must have an international children’s school, where children from all over the world would study. <…> It is not necessary for there to be a political background like in Soviet times. <…> It can admit children from disaster areas, who, growing up in Russia, will then disperse all over the world, becoming people for whom Russia is a second home. They will not tolerate lies about this country and will support it.
The government should care about this because it affects future relationships with many countries. In Russia, they provide good education, so when people return to their countries, they get good positions in top government institutions and become influential people with influential friends. Do you understand?
White became a citizen of Cyprus in 2015 by purchasing a luxurious villa near Limassol, on the south coast of the island, as part of a program where you can get citizenship by investing. At the entrance of the villa, there's a playful sign “The Whyte House”, resembling the White House – the official residence of the US President.
The entrance of Eric White's mansion in Cyprus White’s home in Cyprus is located next to the home of Vladimir Popov, deputy head of the former VTB subsidiary in Cyprus, RCB Cyprus. A large part of RCB unexpectedly ended up with its top managers in 2009. Sources related to VTB then claimed that in reality this Cypriot bank moved away from state-owned VTB and went to Kostin’s people. It was then discovered that some companies linked to Andrey Kostin, managed by White through an offshore network, received millions of dollars in loans from RCB Cyprus.
“White may have acted as Kostin’s confidante,” stated Tamara Makarenko, a business intelligence analyst with significant experience in investigating oligarchs, after reviewing the materials collected by OCCRP. She points out that property ownership schemes suggest such an idea, and that oligarchs used similar schemes to conceal their assets.
Kostin had reason to take care of the property he had accumulated over his long years as a state banker: he has long been under US and European sanctions and risks losing his foreign assets if they are discovered by EU or US authorities.
winery
During the Soviet era, some members of the party elite had summer residences in the sunny seaside town of Foros on the Crimean peninsula. After Crimea’s annexation to Russia in 2014, the Russian elite extended their influence there. For the first time, there were reports that Andrei Kostin had purchased a luxurious villa in Foros along with the Alma Valley winery in the Alma River Valley.
“The management of the winery does not disclose who owns it, although Russian media suggest that this is the president of one of the most influential Russian banks,” Meininger Wine Business International magazine reported in 2015. The article mentioned that the vineyard in Alma was personally planted by Vladimir Putin.
While the property’s connection to Kostin has never been conclusively proven, the EU referenced his ownership of the estate and winery when it imposed sanctions on him in 2014, stating that Kostin supported “activities and policies that undermine Ukraine’s territorial integrity” and benefited from annexation.
It was later revealed that the winery and estate had been under the control of Eric White for years. White’s offshore company Vargas Properties controlled the Russian company that owns both the house and the winery. In March, shortly after Russia invaded Ukraine and triggered another round of sanctions against prominent Russians (including Kostin himself), ownership of the property was transferred to a Russian company whose owner was not disclosed.
Flat and home
White had companies in the British Virgin Islands that were involved in the exchange of expensive property in Moscow between Kostin and his girlfriend, including a winery.
The Anti-Corruption Foundation of Russian opposition leader Alexei Navalny revealed how two fancy flats were given to Kostin’s girlfriend, TV presenter Naila Asker-Zade. One flat was gifted by a top VTB manager, and the other was presented by the state bank itself. But there was an intermediary in the transfer of the flat from VTB to Kostin’s girlfriend. A year before Asker-Zade got the flat, the property was transferred to an offshore company registered in the British Virgin Islands, Erelson Investments.
It turned out that this company belonged to Eric White. Another of his offshore firms acted as an intermediary in the transfer of the Moscow home from VTB to Kostin himself. The State Bank transferred ownership of a luxury three-story townhouse in Moscow to Whyte’s Laroy Enterprises in 2006. In October 2015, she handed it over to Kostin. The following year, he sold the townhouse to Angerston Holdings in Cyprus. For this deal, Angerston received a $7 million loan from the now former VTB bank in Cyprus, RCB Cyprus, which soon transitioned away from the state-owned VTB and went to people close to Kostin.
An expert on anti-money laundering in Cyprus, Anna Stylianou, informed OCCRP that before the tightening of rules in 2018, many wealthy Russians transferred their property to Cypriot companies in order to remain anonymous and avoid paying taxes.
An expert explained that real estate rental income could be presented as income from dividends from companies in Cyprus and was therefore not taxed. Cyprus was popular for this because, until last month, it did not have a public database of ultimate beneficial owners. Stylianu concluded that it was easy to hide Russian property in Cyprus.
Hotel in Austria
Located high in the Alps, the luxurious Tannenhof Hotel in Austria’s elite ski area Sankt Anton am Arlberg consists of seven large suites, with the most expensive costing around $6,000 per night. A British travel journalist compared the situation there to a fabulously luxurious alpine retreat created by a close billionaire friend.
Austrian Hotel Tannenhof
According to multiple media reports, the Tannenhof is owned and operated by married couple Axel Bach and Judith Volker, who apparently completely rebuilt it in 2011. In a 2017 interview, Bach revealed that the unexpected windfall helped him realize his philosophy of hospitality, suggesting that he used the money to buy the hotel. Bach recalled that the notary had been looking for him for a year and a half, asking what he would do with all the money.
Another article from the same year reported that Bach and his wife had sold an estate in Italy to buy a hotel. According to former hotel chef James Baron, staff were also told that the establishment was owned by Bach and Volker.
But Austrian and Cypriot business reports indicate that between 2010 and 2015, the Tannenhof hotel was possessed by a Cypriot entity controlled by VTB. Whether the bank established this arrangement for any customer's benefit was not revealed.
The US and EU enforced penalties on VTB in 2014. The following year, the ownership structure of the Tannenhof changed. Before the sanctions, the hotel was owned through the ITC Consultants (Cyprus) company established by VTB.
In 2015, ownership shifted to other Cypriot companies – Cahulia and Aktien Enterprises. The owners of these companies were not disclosed. This all changed when – after pressure from the EU for many years, Cyprus released a record of beneficial owners. Eric White turned out to be the owner of Aktien Enterprises.
Resort in the Tver region
Another offshore company, Bramsen Trading of the British Virgin Islands, also mentions Kostin’s connections to White. Bramsen was created in 2010 by Kostin’s son Andrey, who passed away the following year in an ATV accident. After that, White became the actual owner of Bramsen. The transfer of the firm, as well as the involvement of White’s other companies in the transfer of ownership, may indicate that “he is a confidant of Kostin,” says Austrian anti-money laundering expert Florian Horsica.
Bramsen Trading was dissolved in 2017, but before that, it was a “daughter” of the Cypriot Naderbord Trading. Since White was listed on corporate documents as the 100% owner of Bramsen, this means that he must also own Naderbord (confirmed by experts). If so, this connects him with the Russian resort and hotel complex in the Tver region “Upper Volga”.
The complex is operated by the Russian company Sezon Okhota, whose former co-owner (Cypriot Egern) in corporate documents declared affiliation with Naderbord.
Egern sold its stake in Open Season in 2016 for $58 million. However, the new owner (another Cypriot company Castelor Investments) is connected to a network of companies owned by Eric White.
French villa and Moscow offices
White’s real estate portfolio includes a property in France associated with Kostin. He owns a luxury villa near Saint-Tropez through Cypriot Gedsea Holdings and its French subsidiary. Gedsea purchased the property in 2009 from Swiss businessman Roger Markus Ingold, who was an adviser to Kostin.
The French registry shows that, through the Cypriot Hundbern, White also owned a property in Paris on the banks of the Seine in 2010 valued at 6.2 million euros.
White is also the director of the Russian branch of a Cypriot company that owns an old merchant’s mansion in Moscow, which was converted into elite offices.
Real estate associated with Andrey Kostin and Eric White companies around the world
Related persons
Kostin also owned another apartment in the center of Moscow, in the luxurious Embassy House residential complex, so named because of its proximity to the Russian Ministry of Foreign Affairs. The apartment was valued at $2.8 million. In 2016, Kostin transferred this property to the Cypriot Eralmor Holdings.
Who owned Eralmor remained a mystery. But Alexei Navalny, in his investigation, suggested that the company was somehow connected with the state banker. Eralmor was established at the same address and utilized the same nominee directors as the offshore firm of Kostin’s girlfriend, Asker-Zade.
Eralmor was part of a large network of foreign companies connected to Eric White’s organizations, according to OCCRP. The network held more valuable assets than just an apartment in the “Ambassador House.”
Some of these companies were owned by another person associated with VTB and Kostin: Natalia Solozhentseva, who used to work as a director at RCB Cyprus in the past. Others have identified themselves in corporate filings as “related parties” to White’s companies. This means that companies have, for example, a common owner or shareholder, and it is usually mentioned in their corporate records.
After examining these reports, OCCRP was able to outline a network of foreign companies linking Eric White’s organizations in the British Virgin Islands and about 10 other firms, mostly registered in Cyprus (including Eralmor, which owned Kostin’s apartment). Each of these companies was created by the same person: the Cypriot lawyer Christodoulos Vasiliadis, whose office is very close to the Russian Embassy in Cyprus.
What Christodoulos Vasiliadis found useful
Christodoulos Vasiliadis, a Cypriot lawyer handling interesting Russian clients. His clients included businessman Alisher Usmanov and, for example, the ex-wife of criminal leader Semyon Mogilevich, Galina Telesh. Vasiliadis also created all the companies that OCCRP identified as being owned by Eric White. His companies in Cyprus are established directly through his office, while those in the British Virgin Islands are registered with the Panamanian law firm Aleman, Cordero, Galindo & Lee (Alcogal). According to ICIJ, Vasiliadis is a key intermediary who brought many clients to Alcogal and is also a personal friend of Jaime Aleman Healy, the firm’s founder. In exchange, the ICIJ said, the lawyer was given the privilege “not to present certain documents that reveal the true owners and directors of the companies and where the money is coming from.” Vasiliadis declined to comment on the situation.
Fast food and household items
A network of companies associated with White or owned by Solozhentseva held interests in major Russian businesses, including the Russian branches of Burger King and KFC. It is interesting to note that Burger King started a business in Russia with the support of VTB (“VTB Capital”) in 2018. VTB sold its stake in Russian Burger King for 4.6 billion rubles. VTB Capital was also the largest partner of KFC in Russia.
In 2013 and 2014, White’s “related party” Landshut bought shares in CIS Opportunities Fund, an investor in the economies of the former Soviet republics, for $38 million. In January 2014, the fund bought a stake in Burger King’s Russian franchise for $25 million, according to corporate documents.
White’s foreign companies are also connected to Kresorco Enterprises, which owns the Russian Hoff furniture and home goods hypermarket chain. The Cypriot Volkeburg associated with White’s organizations reportedly acquired a 20 percent stake in Kresorco in 2011, according to reports. As of 2020, this stake was valued at $62 million.
Another Cypriot company, IFG Fund AIFLNP VCIC, a subsidiary of Solozhentseva’s organization, acquired a stake in the Russian KFC franchise in 2018. And in 2021, Ozon.ru shares worth $49 million and a stake in the Russian retail chain Fix Price during its IPO.
Whether White still serves Kostin’s money and other assets or works, including for himself and various wealthy people, helping them manage their property, it was not possible to clarify. White, Kostin, and VTB did not respond to OCCRP questions about real estate, investments, and the offshore network.
In March 2021, in his “Congratulations from Cyprus”, addressed to the former pupils of the Soviet Interdom, White could not resist rhetoric:
“Life is not an easy thing <…>. In order to be successful, you need two things – work and luck. Luck helps, but you have to work,” he taught.
