U.S. commerce chief Ross kept holdings in Russian-tied firm: reports

[November 06, 2017]  WASHINGTON (Reuters) - U.S. Commerce Secretary Wilbur Ross has kept investments in a shipping firm with significant business ties to Russian President Vladimir Putin's inner circle, according to media reports citing leaked documents from an offshore law firm.

The files, released late on Sunday, are part of the so-called Paradise Papers, a trove of leaked offshore investment documents that relate to the affairs of wealthy individuals and institutions ranging from Ross to Britain's Queen Elizabeth and trading firm Glencore <GLEN.L>.

The documents were obtained by Germany's Sueddeutsche Zeitung newspaper and shared with the International Consortium of Investigative Journalists (ICIJ) and some media outlets. Reuters has not independently verified the documents.

Partnerships used by Ross, a billionaire investor helping to shape President Donald Trump's trade policy, have a 31 percent stake in Navigator Holdings, which the New York Times said earns millions of dollars a year transporting gas for Russian petrochemical firm Sibur.

Gennady Timchenko, a Russian oligarch and Putin associate subject to U.S. sanctions, and Putin's son-in-law, Kirill Shamalov, are Sibur stakeholders, said the Times, which based its report on the files from Appleby, a prominent offshore law firm.

Reuters was unable to independently confirm the Times' findings.

Ross, in an interview on CNBC on Monday, said he had disclosed his holdings in Navigator and that there was nothing improper about the company's ties with Sibur.

Navigator was mentioned in Ross's 57-page public financial disclosure report filed in December, before he officially joined the Trump administration. The Times said the latest batch of documents provided more insight into his financial holdings.

SANCTIONS

In an earlier statement, a Department of Commerce spokesman said Ross "was not involved in Navigator's decision to engage in business with Sibur ... has never met the Sibur shareholders referenced in this story and, until now, did not know of their relationship".

He added that Sibur had not been under sanctions when Navigator began its relationship with the publicly-traded firm and still was not.

"A company not under sanction is just like any other company, period. It was a normal commercial relationship and one that I had nothing to do with the creation of, and do not know the shareholders who were apparently sanctioned at some later point in time," Ross told CNBC.

According to the Times, Sibur said in a statement that any negotiations with Navigator over the years were carried out by its executives, not its major shareholders, and that "no meetings were held with Mr Ross."

Neither Navigator nor Appleby were immediately available for comment on Sunday evening. A spokesman for Timchenko declined to comment, while Shamalov did not immediately reply to an email seeking comment. Sibur declined to make any immediate comment.

The Paradise Papers are the second release of its kind by the ICIJ, which last year published the "Panama Papers", leaked documents from Panama law firm Mossack Fonseca that chronicled a shadowy world of offshore holdings and hidden wealth.

Scrutiny of Trump administration officials' possible ties to Russia has intensified as a result of probes into alleged Russian interference in the 2016 U.S. election.

Commerce Secretary Wilbur Ross speaks to the Economic Club of New York in New York City, U.S., October 25, 2017. REUTERS/Brendan McDermid

In its report, the Times said Ross had kept the investment in Navigator, which increased its business dealings with Sibur, including chartering ships - even as Western nations sought to punish Russia’s energy sector over Putin's incursions into Ukraine.

"The Secretary recuses himself from matters focused on transoceanic shipping vessels," the Commerce Department spokesman said, adding that Ross maintains the "highest ethical standards."

"There is nothing wrong with anything that was done," Ross told CNBC, adding that he had not considered resigning in the wake of Sunday's report.

QUEEN'S TAXES

Citing the Appleby documents, Britain's Guardian newspaper said millions of pounds from Queen Elizabeth's private estate, the Duchy of Lancaster, had been invested in a Cayman Islands fund as part of an offshore portfolio never before disclosed.

Reuters could not independently confirm the Guardian report.

The newspaper said the Duchy had used offshore private equity funds designed to shield investors in the United Kingdom from having to pay U.S. tax on their holdings.

A spokesman for Buckingham Palace declined to comment.

A spokeswoman for the Duchy of Lancaster said: "We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate."

The spokeswoman also said the Queen voluntarily pays tax on any income received from the Duchy.

Citing the documents, Guardian also reported that international trading firm Glencore <GLEN.L> had "secretly loaned tens of millions of dollars" to Israeli businessman Dan Gertler, after enlisting him to secure a mining deal in the Democratic Republic of Congo.

The British newspaper said Gertler had denied any wrongdoing. Reuters was not immediately able to contact him.

Glencore said in a statement sent to Reuters on Sunday, but dated Oct. 27 and addressed to the ICIJ, that it had made a loan to a company affiliated to Gertler in 2009 on commercial terms and that it was fully repaid.

"In February 2009, Glencore Finance (Bermuda) Ltd made a loan to Lora Enterprises Limited (Lora), an entity affiliated with Mr Gertler," the company said.

"The loan to Lora was made on commercial terms negotiated at arm's length," it said. "The loan was fully repaid by Lora in 2010."

(Reporting by Susan Cornwell; Additional reporting by Barbara Lewis, Mike Holden and Andy MacAskill in London, Katya Golubkova in Moscow, and Susan Heavey in Washington; Editing by Paul Simao, Mary Milliken, Raju Gopalakrishnan and Nick Tattersall)

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