AED International Ltd., British Virgin Islands (BVI)
At the time the law did not prohibit Duma Deputies from holding shares in foreign companies, but they were required to report it. Company shares are only listed in the confidential part of their annual anti-corruption declaration and are not available to the public. This means that only state bodies can verify whether or not Babakov disclosed his offshore company in anti-corruption declarations from 2007 to 2010. Just before it was time to file pre-election declaration in October 2011 Babakov transferred ownership of the company to his daughter.
Officially, Babakov is one of the poorest deputies of the State Duma. According to the latest available data, in 2014 his family’s income was 4.5 million rubles (US$ 128,000), and two years before that the family earned only 2 million rubles (US$ 64,000) a year. Year after year, Babakov’s declarations state that he does not own any apartments or vehicles. As official figures show, his wife also lives a modest life. However, documents from the Mossack Fonseca database as well as other official registries show that the Babakov family owns both foreign companies and luxury real estate abroad.
Official documents of AED International indicate Babakov may be one of the actual owners of VS Energy, a large holding company that manages energy assets.
The Mossack Fonseca database shows that since 2010, AED International has been managed by V.D. Nominees, which serves as nominal directors or founders in clients’ entities. The database shows that Vilis Dambins and Valts Vigants, two of the company’s employees, manage the firm on behalf of Babakov and the Ukrainian registry of legal entities shows the Latvians among the four owners of VS Energy as of November 2015. Most likely they are proxies hiding the real beneficiaries.
In 2011, Babakov transferred 100 percent of AED International’s shares to his daughter, Olga, who had just turned 23. In the documents Olga Babakova listed an apartment in London as her permanent address. The 100-square-meter two-bedroom apartment is located in the chic and prestigious district of Knightsbridge, right next to Hyde Park. The property, however, does not belong to the Babakov family but to a real estate company. In 2010, the apartment was offered for rent at £ 5 thousand a month (US$ 7,725), which exceeded Alexander Babakov’s monthly income.
Moreover, according to the state registries of France, the Babakov family owns a luxury mansion not far from Versaille, a former residence of the French kings. In the official record of the company managing this property Babakov family listed as their residence a Paris apartment next to the Eiffel Tower (previously reported by the Anti-corruption Foundation in 2013).
Babakov confirmed to Novaya Gazeta that he was affiliated with the company. “AED International was registered under my name, according to BVI’s legislation, without me taking part in it,” because his former partners were actually managing the operations, he said. “I did not take part in company management.”
As for his daughter and her flat in London, he said, “My daughter was of a lawful age at that time and she was not under my control. The flat you are talking about I personally did not rent and did not pay for.”