The Central office of “Rosneft”. The view from the Kremlin
The owner of 19.5% of “Rosneft” was registered in Singapore company QHG Shares, its ultimate owners – the trader Glecnore and the Qatar Fund QIA. The deal was prepared “in turmoil,” acknowledged close to the customers, the source
Registered in Singapore, company Shares QHG Pte Ltd acquired the right to dispose of the 19.5% of Rosneft shares, follows from materials of the Russian company. This means that it became the ultimate owner of the privatized in December of a package of “Rosneft”. QHG Shares represents the interests of a consortium of Glencore and Qatar’s sovereign Fund QIA to the documents of the Singaporean and British registers, the studied RBC.
QHG Shares Pte Ltd acquired the right to dispose of 2 066 727 473 shares of “Rosneft”. In the materials of “Rosneft” stated that the basis by which the company acquired the right to dispose of a share, came on 15 December 2016. This date took place in government directives as the deadline for the closing of the sale of 19.5% of “Rosneft” reported the Agency. On the same day Rosneftegaz has transferred funds from the transaction to the Federal budget. However, Glencore has confirmed the completion of the calculations only on 3 January 2017, and “Rosneftegaz” — 4 Jan. In the January message to the state holding reported on “the completion of all business, technical closing procedures and settlement” associated with the transaction. Thus “Rosneftegaz” clarified that it was about the preparation of more than 50 documents and agreements entered into “more than five” jurisdictions.
The official representative of Rosneft declined to comment. The representative of Glencore have not yet responded to a request to RBC, the press service of the QIA is also not answered.
As previously reported by RBC, December 5, Swiss trader Glencore, registered in the UK three companies in the form of a limited liability partnership (LLP): Investment QHG, QHG QHG Holding and Trading. At the end of December in all companies as a partner, I was the “daughter” of the Qatari state investment Fund QIA — Qatar Holding. 10 January “Rosneft” reported about the signing of the contract for the supply from 4.5 million to 11 million tons of oil annually to one of the joint ventures, Glencore and QIA — QHG Trading — for five years.
QHG Shares was registered in Singapore on 8 December 2016, type of legal entity — private limited company (Pte Ltd, the most popular form of ownership in Singapore for large businesses), it follows from statements of the Singapore corporate registry (there RBC). The authorized capital is divided into 201 ordinary share and €10,243 billion — it is fully paid, to the document. The amount of the transaction for the purchase of 19.5% of shares of “Rosneft” amounted to just €10.2 billion, reported earlier, Rosneft, and Glencore.
The owner is Singaporean QHG QHG Shares Investment LLP. This is one of the three companies, Glencore and QIA established in England in early December 2016. In QHG Investment partners (participants) are Qatari Qatar Holding (“a daughter” the sovereign Fund QIA) and the same British QHG Holding. And in the last three partners — Qatar Holding, the structure of Glencore and registered in December in the Cayman Islands offshore QHG Cayman. It follows from the data of the British corporate registry that was read by RBC. The role Kamenskogo offshore in the structure of owners is unclear, its unknown beneficiaries.
QHG and QHG Holding Investment at the beginning of January 2017, took a loan from the London branch of the Italian Bank Intesa Sanpaolo, provided a kind of guarantee that follows from the information in the British registry. In particular, QHG Investment, the indirect owner of 19.5% of Rosneft shares, registered in the corporate registry two mortgage document. What exactly was laid by the consortium members was not reported, but previously, “Rosneft” said that the loan will be its shares acquired by Glencore and QIA. Intesa January 4 confirmedthat he would provide the consortium a loan of €5,2 billion on the purchase of shares of “Rosneft”. The consortium members paid for their own means only €2.8 billion (and Glencore — only €0.3 billion), it follows that someone had to Finance another €2.2 bn Tuesday, 10 January, the representative of Intesa did not respond to a request RBC.
In February 2016 President Vladimir Putin at a meeting on privatization, noted that in conducting privatization transactions “it is necessary to ensure maximum transparency <…> as for their members and for the public.”
The deal in a hurry
“First investors (Glencore and QIA) considered different jurisdictions, including Jersey, for the purchase of 19.5% of “Rosneft”. But the investment consultant Intesa did not like these options, and they agreed to use Singapore”, — told RBC a source close to the buyers.
According to him, registration of the company holder of shares of “Rosneft” in Singapore, there is “nothing unusual”. “Just had a lot of turmoil due to the timing, which put the government of the Russian Federation”, — he explained. Privatization of “Rosneft” was to be completed by 15 December and by the end of the year “Rosneftegaz” was to transfer funds received to the budget.
To select Singapore there are many reasons, including English law, says the interlocutor of RBC, close to the buyers of a stake in Rosneft. All offshore companies have about the same set of advantages and similar investment regulation, but Singapore has a very high reputation relative to similar jurisdictions, investors have confidence in the local bureaucracy, there is a strong court of arbitration, he says. Apparently, Singapore has become the neutral jurisdiction, which satisfied all parties, he suggests. In addition, Singapore could be a more convenient platform for investors from the point of view of taxation and disclosure, concludes the source.
Between Russia and Singapore have an agreement on the avoidance of double taxation, “it is quite good”, says the lawyer of tax practice of legal firm Sameta Dmitry Onishchenko. Besides, Asian countries such as Singapore, have felt less impact of the sanctions policy of Western countries, he says.
Tax conditions can be one of the reasons for this structuring of the transaction, agrees to partner with Nektorov, Saveliev & Partners Alexander Nektorov. Between Russia and Singapore has a tax Treaty, according to which dividends paid out of Russia are subject to Russian tax at source (in this case “Rosneft”) at the rate of 5%, provided that if the recipient of dividends (QGH Shares) owns not less than 15% of the capital of the company paying the dividend, he says: QIA and Glencore satisfy this requirement. In turn, Singapore has the so-called territorial tax system, which assumes that income received from companies from outside Singapore are not taxable in the heart of Singapore, if they are not physically transferred in this country, continues Nektorov. In addition, Singapore has a whole series of tax advantages, for example, dividends paid from Singapore are not taxed at source in the heart of Singapore, which allows tax-free regime to ensure the continued transit of dividends. Finally, in this country, almost no tax on capital gains in respect of shares, which allows not to tax the profits realized from the resale of the shares, he concludes.
“Registered in the UK partnership (LLP) may not qualify for benefits under the current between Russia and the UK agreement for avoidance of double taxation. Therefore, dividends paid by Rosneft directly to the partnership could be taxed in Russia at the normal rates (15%), which must be very expensive. In this regard, the use of an intermediate tool of tenure in the structure is needed,” added Nektorov.
With the participation of Oleg Makarova and Alena Russian