It’s been an international conundrum for two years: Who really owns the lavish Vancouver Island estate where Prince Harry and Meghan wintered in 2020 as they reportedly hatched their plan to step back from official royal duties ?
Is it the Russian-born billionaire who many media related to the property? Is it the Canadian mining magnate Frank Giustra, as stated (wrongly) by page six of the New York Post?
CBC and Radio-Canada found the answer, and it was indeed a Russian, but it wasn’t easy — it took an international leak of data on tax havens, access to internal files of intense research and enterprise. All of this, experts say, shows once again just how opaque Canada is when it comes to assets like real estate and who owns them.
“It’s very easy for criminals around the world to launder their dirty money in Canada and buy real estate,” said Kevin Comeau, lawyer and financial transparency expert. “And we have no way of knowing who they are or [the] ability to chase their money. “
From British Columbia to the Caribbean to the Channel Islands
There is no suggestion of crime surrounding Mille Fleurs Mansion in North Saanich, about 30 kilometers off Victoria Island. But it certainly protects its owner well.
For starters, unlike most properties in British Columbia, you can’t find it in the provincial land registry.
That’s because the mansion isn’t registered as a single property, but is part of a stretch of beachfront land on the Saanich Peninsula owned by a company called Towner Bay Country Club. Each owner on the land has shares in the country club corresponding to his lot.
Club records are not public. But CBC/Radio-Canada was able to review an internal spreadsheet that tracks property tax for club owners. It lists a British Virgin Islands company called JEMC Management as the owner of Mille Fleurs.
British Virgin Islands company records do not disclose a company’s shareholders. So the property track would normally stop here, but for a stroke of luck: Pandora’s Papers – the huge cache of leaked tax haven records obtained by the Washington-based International Consortium of Investigative Journalists, and shared with CBC/Radio-Canada – shows that JEMC Management is owned by another Bahamian-registered company called Orland Properties.
Orland, in turn, is owned by a trust called Andromeda Trust, formed under the laws of the Bailiwick of Jersey, a small tax haven off the coast of France. The trustee is a company whose sole director resides in Cyprus.
But who is the money behind it?
The Andromeda Connection
Two years ago, when speculation about who Harry and Meghan was really hosting reached fever pitch, one name that kept emerging was billionaire venture capitalist Yuri Milner, arguably the most prominent Russian-born investor. view of Silicon Valley.
Milner is reported to hang out with celebrities on a superyacht – a boat also called Andromeda – and he knows Canadian music producer David Foster, whose wife has known Meghan Markle since their school days.
16-time Grammy winner Foster even gave an interview to The UK’s Daily Mail about the mansion in 2020, where he said he had been friends with the mansion’s owner for years. The music producer said that although Milner did not own it, he helped Milner rent the house “about five or six years ago…for a short time.”
Mutual funds run by Milner took early positions in Facebook and Twitter before those companies went public, holdings that generated huge profits. But as journalists revealed in 2017, about half of the capital of his company’s investments in Twitter came from VTB Bank, Russia’s second-largest, majority state-owned bank.
“It’s probably one of the two banks that funds the most connected officials and oligarchs,” said Jamison Firestone, who practiced business law in Moscow for nearly two decades and became a leading figure in the global campaign against Russian state corruption. He called VTB a “slush fund” for the Russian government.
Milner’s Facebook game, meanwhile, was fueled in part by money from a company that had itself secured hundreds of millions of dollars in loans from a subsidiary of Russia’s state-owned energy company Gazprom, the same media investigation showed. An oligarch named Alisher Usmanov ran the Gazprom subsidiary and eventually got a stake in Milner’s Facebook investment.
Milner said he was just doing business, looking for backers and making investments. While VTB Bank and Gazprom are under sanctions in Canada, the US and the EU, it only started in 2014 – three years after he raised the money.
A spokesperson for Milner told CBC that VTB’s funding was repaid that year and that Milner had not raised capital from Russian investors since 2011. Usmanov was only added to the list of Canada’s sanctions only in March. Milner has never been sanctioned and is not generally considered an oligarch.
In early April, CBC asked Milner if he directly or indirectly owns the estate where the royal family spent Christmas and New Years in 2019-20.
The response came from Alice McGillion of New York-based reputation management firm Rubenstein: “We can officially confirm, as we always have [in] past, that neither Yuri Milner nor any member of his family nor any entity affiliated with him or his family owns the Thousand Flowers Mansion on Vancouver Island or any other property in Canada. McGillion referred CBC to the interview given by music producer Foster.
However, documents found by CBC News in the Pandora Papers leak reveal that the Andromeda Trust – the Jersey-incorporated entity at the top of the chain of offshore companies leading to the Mille Fleurs property – did not always go by that name. .
Until February 2016 it was called the Yury Milner Trust (variations in the English spelling of Russian names are common).
A letter written by a lawyer for Milner in 2018, found in the leak, explains the origins of the trust: “The person who brought the assets,” she says, “was Yury Milner.”
The letter continues: “Potential beneficiaries of the Andromeda Trust include charities, relatives and friends of Yury Milner.
Another filing says that prior to 2015, “Yury Milner exercised control over” a series of companies including JEMC Management, which purchased the Mille Fleurs mansion.
CBC News returned to Milner with these findings. The answer this time was quite different.
McGillion sent another statement, asking that it be attributed to an anonymous “trusted spokesperson.”
The statement admitted that Milner’s trust, funded by him, purchased the mansion in 2013. It acknowledged that, in fact, Milner himself was a beneficiary of the trust at the time. And he repeated that Prince Harry and Meghan’s stay had been organized by David Foster.
The statement explained all of this by saying, however, that Milner and his wife decided in 2013 to pledge to donate the majority of their wealth to charity. The following year, Milner withdrew himself as a beneficiary of the trust he had created, to benefit newly formed charitable foundations which the statement did not name. In 2018, all of his relatives were also removed as potential beneficiaries, the statement added.
It is therefore no longer “affiliated” with the manor, the statement said.
He also confirmed that Milner had a similar trust agreement for the 107m superyacht Andromeda – a vessel he has so far denied owning, but has a talent for being spotted partying and on holiday on. The statement says he is also not “affiliated” with the yacht.
Firestone, the former Moscow lawyer, said it was a legal distinction with little difference.
“If you have exclusive use of something, you basically have all the benefits of owning it without having to legally own it,” he said. “So yeah, he may not be the owner, but he may very well be the ultimate beneficiary, which is basically the same for all of this.”
WATCH | See the BC property where Harry and Meghan stayed in 2020:
“We don’t have the tools at the moment”
The mystery of the Vancouver Island mansion shows how thorny it can be to know who really owns a property in Canada, which can make confrontation extremely difficult the scourge of money laundering in Canadian real estate, or to confiscate the wealth of Russian oligarchs, said transparency expert Comeau.
“We don’t have the tools right now to find, let alone seize, these assets. You can’t seize them until you identify them and link them to these Russian oligarchs.”
In a Canadian first, British Columbia has adopted a public property transparency database that is expected to be fully operational in November.
Meanwhile, federal and provincial governments have been discussing since 2019 setting up registries to track the beneficial owners behind legal persons like corporations and partnerships. Justin Trudeau’s Liberals originally promised by 2025, but amid the new urgency of unprecedented sanctions against Russia and a number of oligarchs, Finance Minister Chrystia Freeland promised in her speech on the budget last week to push that back until 2023, at least for federally incorporated businesses. .
Responding to a question from Radio-Canada last week, Freeland said that while it will be difficult to get all provinces to agree to adopt what is called beneficial ownership transparency for companies registered at the provincial, it is “really important” for democracy and the economy. .
“I hope we are at a time when there is a real national consensus,” she said. “We need to know what money is investing in assets in Canada.”