EY Ireland has resigned as auditor to an Irish company it believes to be owned by a sanctioned head of Russian oil giant Rosneft more than two years after he was added to the European Union sanctions list.
In a letter dated July 5th, the Big Four accountancy firm informed the Registrar of Companies that it has resigned with immediate effect as auditor to Rosneft Designated Activity Company, an entity registered in the Republic. EY told the Companies Registration Office that its “withdrawal” comes as a result of Igor Ivanovich Sechin, chief executive of Rosneft, being added to the EU sanctions list.
The firm said it was its “reasonable belief” that Mr Sechin owns and/or controls” the Irish entity. The provision of accounting services – including auditing, bookkeeping and tax consultancy – to the Russian government or people and companies established in Russia was prohibited by the European Commission in June 2022 in response to the invasion of Ukraine.
In keeping with its obligations under the Companies Act, EY, which provided audit services to the company from 2014, said in the letter: “We would draw the attention of [company] members and creditors to the fact that Igor Ivanovich Sechin has been listed in annex 1 of the [EU] regulation and that the services we provide to Rosneft International DAC are prohibited.”
EY Ireland told The Irish Times that it had not provided any services to the Rosneft entity since February 2022 but declined to say why it took almost 2½ years for it to resign and notify the registrar. In response to questions a spokesman for the firm said: “EY Ireland confirms that it has provided no audit or other services to Rosneft International DAC since February 2022. The last audit report which it prepared for Rosneft International DAC was its 2019 audit, which was finalised in 2021.”
Mr Sechin was one of 27 Russians added to the sanctions list in late February 2022, shortly after the invasion of Ukraine. In the EU’s list of sanctioned people, Mr Sechin is referred to as the head of “one of the world’s largest crude oil producers” and “one of Vladimir Putin’s most trusted and closest advisers, as well as his personal friend”. The wider Rosneft group was hit with sanctions in 2014 after the invasion of Crimea.
Rosneft International DAC, which was incorporated in 1996 and has an address in an office building near Dublin’s Capel Street, has not filed accounts since 2020. In its most recently available set of accounts, the directors described the company’s activities as “the facilitating of investment activity of its ultimate parent by receiving loans and providing finance to its subsidiaries and affiliates”.
A related Irish company, Rosneft International Finance DAC, made international headlines in March 2022 when it repaid $2 billion (€1.81 billion) of bonds amid concerns that Russian companies might effectively default on loans in the face of international sanctions.
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