Government Initiates Legal Proceedings Against Roman Abramovich
The British government is preparing to take legal action against Russian billionaire Roman Abramovich after he failed to meet a crucial deadline for releasing the £2.35 billion raised from the sale of Chelsea Football Club in 2022. Abramovich had until March 17 to transfer the funds, which the government intends to allocate for humanitarian assistance in Ukraine, following Russia's invasion of the country.
Dispute Over Fund Allocation and Delays
Abramovich's representatives previously claimed in November that government actions were 'paralysing' efforts to release the money. In response, the government granted him a licence in December, accompanied by a 90-day ultimatum to comply. However, the oligarch, who was forced to sell Chelsea due to sanctions over his alleged ties to Vladimir Putin, has not approved the transfer.
A government spokesperson stated: 'We gave Roman Abramovich his last chance to do the right thing. Once again, he has failed to make the donation he committed to. We will now take further steps to ensure that the promise he made at the time of the Chelsea sale is kept.'
Complications and Financial Details
In 2022, Abramovich pledged that the sale proceeds would be used 'for the benefit of all victims of the war in Ukraine', leaving open the possibility of donations to Russian people as well. However, it emerged in November that only the 'net proceeds' would be gifted to a charitable foundation, as loans totalling £1.54 billion need to be settled with Abramovich-owned companies first. This would leave approximately £987 million of the £2.35 billion available for war victims.
The Office of Financial Sanctions (OFSI) issued a licence in December for the cash to go to a humanitarian foundation, but Abramovich's approval never materialised. All funds from the sale remain in the bank account of Fordstam Ltd, the former parent company of Chelsea owned by Abramovich.
Government Frustration and Legal Threats
Back in June, the government threatened Abramovich with legal action. Chancellor Rachel Reeves and then-foreign secretary David Lammy warned that ministers were 'deeply frustrated' at the lack of progress in unlocking the frozen funds. A statement at the time read: 'The Government is determined to see the proceeds from the sale of Chelsea Football Club reach humanitarian causes in Ukraine, following Russia's illegal full-scale invasion. We are deeply frustrated that it has not been possible to reach agreement on this with Mr Abramovich so far.'
The statement continued: 'While the door for negotiations will remain open, we are fully prepared to pursue this through the courts if required, to ensure people suffering in Ukraine can benefit from these proceeds as soon as possible.'
Recent Developments and Ongoing Issues
According to reports, government officials wrote to Abramovich's team on Monday, notifying them of possible legal action. A major complication is the dispute between Abramovich and the British government over where the Chelsea sale money should be spent. Abramovich, 59, has been clear since 2022 that he wants the cash to support both Ukrainians and Russians affected by the war.
Fordstam Ltd's delayed accounts, published in November, indicated that loans to the Abramovich-owned company totalling £1.54 billion must be paid off before any money can go to Ukrainian charities. If these loans and other costs are settled in full, around £987 million of the £2.35 billion sale price would remain for good causes.
American billionaire Todd Boehly and Clearlake Capital paid £2.5 billion for Chelsea in 2022, with £2.3 billion left after transaction-related expenses such as legal fees. At the time of the sale, Roman Abramovich's press office said he 'wanted the proceeds to be transferred to a charitable foundation for the needs of the victims on both sides of the conflict between Russia and Ukraine'.
