Months after Putin’s forces invaded, Murtaza Lakhani’s company Cetracore bought shipments from Rosneft, Russia’s state oil company
Abig Tory donor has cultivated deep links with the Kremlin’s oil company and continued to trade Russian oil during the invasion of Ukraine, a Times investigation has found. Murtaza Lakhani, a Canadian-Pakistani oil trader, gave the party £500,000 in 2019 through his company Mercantile & Maritime UK before Boris Johnson’s election victory.
Cetracore, an Austrian company he majority-owns, bought ten shiploads of oil products in August from Rosneft, Russia’s state oil company, months after President Putin launched the conflict in Ukraine, according to industry data shared with The Times and the investigative news organisation SourceMaterial.
Another of Lakhani’s businesses, the Singapore-based Mercantile & Maritime (MM), made investments in Rosneft’s vast Vostok project last year, which aims to develop new oilfields in northern Siberia.
There is no suggestion that the current trading in Russian oil products, or MM’s investments in Russia, put MM in breach of current British, EU or Singaporean sanctions regimes. UK and EU bans on trading in Russian oil come into effect at the end of the year.
However, British oil businesses such as BP and Royal Dutch Shell wound down trade in Russian oil from shortly after the war began.
As well as being a big party donor, Lakhani’s company MM has used for its press relations a firm closely linked with the Conservative Party, Hawthorn Advisors.
The company counts Ben Elliot, a former Conservative Party chairman, as a director and has recently represented Akshata Murty, wife of Rishi Sunak. It is understood that Hawthorn provided only PR advice and representation to Lakhani’s company.
Lakhani had previously built a deep relationship with Rosneft that is illustrated by a cache of documents leaked from the Russian group’s Swiss subsidiary, Rosneft Trading SA (RTSA).
The documents detail a 2019 deal between RTSA and Mercantile & Maritime in which Lakhani’s group would ship and sell oil the Rosneft subsidiary had acquired from Venezuela with the pair splitting the profits 50-50.
Venezuela’s state oil company PDVSA had been sanctioned by the US government earlier that year in response to disputed elections in which President Maduro clung to power.
The US Treasury had also warned oil companies that it reserved the right to sanction them by banning them from access to the US financial system if they continued to trade with the Venezuelan oil sector after President Maduro refused to accept defeat in the 2018 election.
Maduro is a key Putin ally, who has been supported by Russian arms sales and diplomatic support.
A former RTSA executive described the Venezuela arrangement as an attempt to prevent the Rosneft subsidiary from being sanctioned itself, as trade by MM was less likely to be noticed by the US government.
“The arrangement with MM inserted an unnecessary counterparty into a transaction for an unnecessary cost. It’s a screen, intended to protect RTSA from the possibility of US sanctions for trading Venezuela,” the source said.
Emails seen by The Times appear to show Rosneft employees discussing the trades in code. “The payment for the Voronezh crude cannot be made in cash, we cannot use any banking channel,” one Rosneft email said.
Voronezh, a city in southwestern Russia, was used as code for Venezuela after the introduction of sanctions, the former executive said.
Ryan Fayhee, a former sanctions prosecutor at the US Department of Justice, said: “The transactions, as detailed to me, present fairly stark and unexplained red flags that appear to have no legitimate business purpose and are consistent with my own experience in detecting and uncovering sanctions evasions schemes.
“US authorities have been intensely focused on interrupting these networks and ultimately appear to have targeted this conduct through secondary sanctions authorities.”
The US Treasury eventually did ultimately impose sanctions on RTSA in February 2020, for brokering the sale and transport of Venezuelan crude, which Washington said impeded its attempt to “prevent the looting of Venezuela’s oil assets by the corrupt Maduro regime”.
A spokesman for Lakhani and MM said that the relationship was wound down when RTSA was sanctioned in line with US legal requirements.
He said MM had a commercial relationship with RTSA providing logistics and marketing services when the Rosneft trading arm was lawfully lifting Venezuelan oil to repay debts owed to it.
“Rosneft Trading’s lifting of Venezuelan oil was public knowledge at the time. MM had similar arrangements with Rosneft Trading — and with other traders and international companies — in relation to crude of various origins,” the spokesman said.
“The suggestion that MM was involved in arrangements designed to conceal Rosneft’s trade in Venezuela to circumvent US sanctions is therefore baseless.
“Mercantile & Maritime Group has always operated in full compliance with all applicable international trade laws and maritime regulations and will continue to do so.”
The Conservative Party accepted Lakhani’s donation in 2019 through his UK company Mercantile & Maritime UK.
At the time the party accepted the donation, it was already on public record that Lakhani had been linked to a 2005 UN report on the Iraqi oil-for-food scandal.
Under the scheme, set up after the Gulf war in 1991, Iraq was only supposed to be able to trade its oil for food, medicine and other essentials.
The report found that Lakhani had made “surcharges” for crude oil on behalf of Glencore, an oil trader, to Saddam Hussein’s Iraq as their local agent. This was despite the UN warning that such payments were in breach of rules.
Neither Lakhani nor Glencore was ever charged with any wrongdoing in the oil-for-food affair.
However, Transparency International said such prior concerns should spark a robust due diligence process for political donations.
The MM spokesman said that its UK subsidiary made a donation to the Conservative Party because, at the time, as a global business with an office in London, it had a vested interest in the security, health and prosperity of the UK economy. Lakhani has never met with or spoken to any British MPs or ministers concerning his business interests or political matters, they said.
The Conservative Party did not respond to a request for comment.
A spokesman for Rosneft said: “Rosneft and its subsidiaries operate in strict compliance with international and national legislation. RTSA ceased operations in May 2020 as a result of unsubstantiated, arbitrary US sanctions imposed on it.”
Do you have a tip for The Times investigations team? Email investigations@thetimes.co.uk
Tory voters: *I will ignore this hypocrisy and vote for them again!*
The Prime Minister’s wife is still receiving money from a company still doing business in Russia. They put a Russian with who’s father is KGB into the House of Lords. They (Tory Party, and MPs) accepted Russian money. The Tory Party refused to investigate Russian interference into the UK democracy.
Is anyone surprised by this news?
I thought it was widely known that the Conservatives were awash with dirty Russian money.
4 comments
Months after Putin’s forces invaded, Murtaza Lakhani’s company Cetracore bought shipments from Rosneft, Russia’s state oil company
Abig Tory donor has cultivated deep links with the Kremlin’s oil company and continued to trade Russian oil during the invasion of Ukraine, a Times investigation has found. Murtaza Lakhani, a Canadian-Pakistani oil trader, gave the party £500,000 in 2019 through his company Mercantile & Maritime UK before Boris Johnson’s election victory.
Cetracore, an Austrian company he majority-owns, bought ten shiploads of oil products in August from Rosneft, Russia’s state oil company, months after President Putin launched the conflict in Ukraine, according to industry data shared with The Times and the investigative news organisation SourceMaterial.
Another of Lakhani’s businesses, the Singapore-based Mercantile & Maritime (MM), made investments in Rosneft’s vast Vostok project last year, which aims to develop new oilfields in northern Siberia.
There is no suggestion that the current trading in Russian oil products, or MM’s investments in Russia, put MM in breach of current British, EU or Singaporean sanctions regimes. UK and EU bans on trading in Russian oil come into effect at the end of the year.
However, British oil businesses such as BP and Royal Dutch Shell wound down trade in Russian oil from shortly after the war began.
As well as being a big party donor, Lakhani’s company MM has used for its press relations a firm closely linked with the Conservative Party, Hawthorn Advisors.
The company counts Ben Elliot, a former Conservative Party chairman, as a director and has recently represented Akshata Murty, wife of Rishi Sunak. It is understood that Hawthorn provided only PR advice and representation to Lakhani’s company.
Lakhani had previously built a deep relationship with Rosneft that is illustrated by a cache of documents leaked from the Russian group’s Swiss subsidiary, Rosneft Trading SA (RTSA).
The documents detail a 2019 deal between RTSA and Mercantile & Maritime in which Lakhani’s group would ship and sell oil the Rosneft subsidiary had acquired from Venezuela with the pair splitting the profits 50-50.
Venezuela’s state oil company PDVSA had been sanctioned by the US government earlier that year in response to disputed elections in which President Maduro clung to power.
The US Treasury had also warned oil companies that it reserved the right to sanction them by banning them from access to the US financial system if they continued to trade with the Venezuelan oil sector after President Maduro refused to accept defeat in the 2018 election.
Maduro is a key Putin ally, who has been supported by Russian arms sales and diplomatic support.
A former RTSA executive described the Venezuela arrangement as an attempt to prevent the Rosneft subsidiary from being sanctioned itself, as trade by MM was less likely to be noticed by the US government.
“The arrangement with MM inserted an unnecessary counterparty into a transaction for an unnecessary cost. It’s a screen, intended to protect RTSA from the possibility of US sanctions for trading Venezuela,” the source said.
Emails seen by The Times appear to show Rosneft employees discussing the trades in code. “The payment for the Voronezh crude cannot be made in cash, we cannot use any banking channel,” one Rosneft email said.
Voronezh, a city in southwestern Russia, was used as code for Venezuela after the introduction of sanctions, the former executive said.
Ryan Fayhee, a former sanctions prosecutor at the US Department of Justice, said: “The transactions, as detailed to me, present fairly stark and unexplained red flags that appear to have no legitimate business purpose and are consistent with my own experience in detecting and uncovering sanctions evasions schemes.
“US authorities have been intensely focused on interrupting these networks and ultimately appear to have targeted this conduct through secondary sanctions authorities.”
The US Treasury eventually did ultimately impose sanctions on RTSA in February 2020, for brokering the sale and transport of Venezuelan crude, which Washington said impeded its attempt to “prevent the looting of Venezuela’s oil assets by the corrupt Maduro regime”.
A spokesman for Lakhani and MM said that the relationship was wound down when RTSA was sanctioned in line with US legal requirements.
He said MM had a commercial relationship with RTSA providing logistics and marketing services when the Rosneft trading arm was lawfully lifting Venezuelan oil to repay debts owed to it.
“Rosneft Trading’s lifting of Venezuelan oil was public knowledge at the time. MM had similar arrangements with Rosneft Trading — and with other traders and international companies — in relation to crude of various origins,” the spokesman said.
“The suggestion that MM was involved in arrangements designed to conceal Rosneft’s trade in Venezuela to circumvent US sanctions is therefore baseless.
“Mercantile & Maritime Group has always operated in full compliance with all applicable international trade laws and maritime regulations and will continue to do so.”
The Conservative Party accepted Lakhani’s donation in 2019 through his UK company Mercantile & Maritime UK.
At the time the party accepted the donation, it was already on public record that Lakhani had been linked to a 2005 UN report on the Iraqi oil-for-food scandal.
Under the scheme, set up after the Gulf war in 1991, Iraq was only supposed to be able to trade its oil for food, medicine and other essentials.
The report found that Lakhani had made “surcharges” for crude oil on behalf of Glencore, an oil trader, to Saddam Hussein’s Iraq as their local agent. This was despite the UN warning that such payments were in breach of rules.
Neither Lakhani nor Glencore was ever charged with any wrongdoing in the oil-for-food affair.
However, Transparency International said such prior concerns should spark a robust due diligence process for political donations.
The MM spokesman said that its UK subsidiary made a donation to the Conservative Party because, at the time, as a global business with an office in London, it had a vested interest in the security, health and prosperity of the UK economy. Lakhani has never met with or spoken to any British MPs or ministers concerning his business interests or political matters, they said.
The Conservative Party did not respond to a request for comment.
A spokesman for Rosneft said: “Rosneft and its subsidiaries operate in strict compliance with international and national legislation. RTSA ceased operations in May 2020 as a result of unsubstantiated, arbitrary US sanctions imposed on it.”
Do you have a tip for The Times investigations team? Email investigations@thetimes.co.uk
Tory voters: *I will ignore this hypocrisy and vote for them again!*
The Prime Minister’s wife is still receiving money from a company still doing business in Russia. They put a Russian with who’s father is KGB into the House of Lords. They (Tory Party, and MPs) accepted Russian money. The Tory Party refused to investigate Russian interference into the UK democracy.
Is anyone surprised by this news?
I thought it was widely known that the Conservatives were awash with dirty Russian money.