4 Oct 2021 12:23

Tinkov settles U.S. tax claims for $507 mln without having to sell TCS shares

MOSCOW. Oct 4 (Interfax) - Russian businessman Oleg Tinkov will pay at least $506.8 million to settle U.S. tax claims, the U.S. Justice Department said in a statement.

This amount includes $248.5 million in taxes Tinkov did not pay in 2013, which increases to $448.96 million with interest and fines, as well as other tax obligations to the United States he was found to owe. Tinkov pled guilty to filing a knowingly false tax declaration.

In order to pay the penalties to settle the tax claims, Tinkov will not have to sell more shares in his TCS Group . "Oleg has sufficient resources in order to fully pay the penalty now without needing to sell his TCS shares," a group spokesman told Interfax.

Under the terms of the plea deal with the U.S. Justice Department, Tinkov, who was arrested in the UK in February 2020, will be sentenced to time served, followed by one year of supervised release, and an additional fine of $250,000.

Tinkov's lawyers said that he thanks the court for the resolution of all contentious issues in the spirit of justice and humanitarianism, which will enable him to focus his efforts on fighting his illness.

Tinkov's sentencing hearing is scheduled for October 29 in the U.S. District Court of Northern California.

The U.S. Internal Revenue Service's claims against Tinkov were first reported in February 2020, and he was later arrested in London. The Justice Department said at the time that he faced up to six years in prison under two charges, but the amount of possible financial penalties was not specified. The U.S. authorities charged Tinkov with tax evasion and concealing his true income.

In March 2020, Tinkov announced that he had been diagnosed with an "acute form of leukemia," for which he is being treated in the UK.

Tinkov received U.S. citizenship in 1996. "From that time through 2013, he filed U.S. tax returns. In late 2005 or 2006, Tinkov founded Tinkoff Credit Services (TCS), a Russia-based branchless bank that provides its customers with online financial and banking services. Through a foreign entity, Tinkov indirectly held the majority of TCS shares," the Justice Department said.

"In October 2013, TCS held an initial public offering (IPO) on the London Stock Exchange and became a multi-billion dollar, publicly traded company. As part of going public, Tinkov sold a small portion of his majority shareholder stake for more than $192 million, and his assets following the IPO had a fair market value of more than $1.1 billion. Three days after the successful IPO, Tinkov went to the U.S. Embassy in Moscow, Russia, to relinquish his U.S. citizenship," the Justice Department said. In the expatriation process, Tinkov reported "that his net worth was only $300,000," and "filed a false 2013 individual tax return that falsely reported his income as only $205,317."

It was reported earlier that Tinkov could use part of the proceeds from the sale of TCS Group shares to resolve his legal problems. Rigi Trust, which is controlled by Tinkov and his family, placed TCS Group Global Depositary Receipts (GDR) totaling $325 million at the end of 2020. In addition to resolving legal issues, part of the proceeds from the SPO were expected to be used to set up a new charitable foundation.

The Tinkov family trust is the principal shareholder of TCS Group, the parent company of Tinkoff Bank and Tinkoff Insurance, with a stake of 35.1%.