On Wednesday, VeloNews published further revelations regarding the criminal investigation in Luxembourg involving Astana Qazaqstan’s paying agent and license holder Abacanto SA. The investigation is focused on the alleged misuse of corporate assets, breach of trust, fraud, and money laundering, with a potential criminal trial on the horizon if the current investigative judge feels as though there is sufficient evidence.
While team boss Alexandre Vinokourov has attempted to distance himself from the investigation, telling VeloNews that he is not involved, an independent report that was commissioned in 2o19 raised serious questions about the financial runnings at Abacanto SA with huge sums of money missing in contract discrepancies, unaccounted for and non-approved use of private jet travel, and over 500,000 Euros paid in ‘consultant fees’ for rider agents.
The report was initiated by Yana Seel, who was then the general manager of the team at the time. Currently at Lotto-Soudal, Seel would not comment when approached by VeloNews regarding Deloitte’s findings but it’s clear from the near 60-page document that she felt that it was necessary for an independent body to audit and advise on Astana’s and Abacanto SA’s spending between the years of 2017 and 2018.
On Wednesday, Vinokourov released the following statement to VeloNews, ahead of the publication of this story.
“To be honest, I learned about this whole story from the press, and until that moment I was not familiar with the details of this investigation,” Vinokourov said.
“Apparently, we are talking about some kind of legal procedure that was initiated a year ago, when another person was the managing director of Abacanto S.A., while I performed purely sports functions until the summer of 2021. Officially, after a break, I returned to work with the team in January 2022, so it’s difficult for me to comment something on this issue.”
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The Deloitte findings were published in an internal and confidential report on October 7, 2019. According to the report, Seel raised concerns over the use of funds within the team almost as soon as she started at Abacanto SA.
The report stemmed from a memorandum from Abacanto SA’s Belgian based legal counsel with that document said to have raised concerns.
Deloitte and their forensic team reviewed all available bank statements between 2017 and 2018, analyzed contracts between the team and several external parties, and had several meetings and calls with Seel in order to attain a full understanding of Abancanto SA’s working practices.
According to the report there were several red flags.
For starters, Deloitte found that there were “multiple signed versions of contractual agreements with the same signature date with related identified payments that did not reconcile.” Those were in reference to paperwork between Abacanto and their then bike supplier Argon 18. Deloitte added that, “the quality of the signatures seems not identical between the agreements, which raises questions about the authenticity of one of the agreements.”
Deloitte also found what they described as “conflicts of interest and unclear selection process of providers; material expenses where the commercial selection rational remains unclear; substantial traveling costs for which no authorisation process could be identified; and that the name of the past signatory of the Company’s bank account was mentioned in a press article on an alleged money laundering and tax avoidance case.”
The report also indicated that the extent of past management powers granted to Vinokourov and related responsibilities remained unclear at the time of publication.
The initial summary adds that: “Our work has revealed serious issues that are extensively documented in the report.”
The report starts with discrepancies in financial reporting around the contract between Abacanto SA and Argon 18, which provided Astana with bikes between 2017 and 2019. According to the report two versions of the sponsorship agreement, both signed at the same time in 2016 had discrepancies between them, and that the payments identified were lower than mentioned in the agreements. The report also states that “the quality of the signatures seems not identical between the agreements, which raises questions about the authenticity of one of the agreements.”
In one contract a value of €6.4m over three years (640 bikes at €10k each) was put on the bikes to be supplied by Argon, with no financial support specified. In the other contract there was no benefit in kind value given but specifies the same number of bikes (64) as well as additional financial support of €3.6m three years. The full value of the contracts was never paid, which could have been down to Argon’s weak finances at the time.
VeloNews has asked Vinokourov – via an Astana press officer – about the discrepancy between the two contracts. We were told almost immediately that Vinokourov would not comment.
VeloNews also reached out to Argon 18 and the Canadian bike brand stated that heading into the final year of the three-year term with Astana a renegotiated contract was put in place because of the insecurity about the finances of the bike supplier. This would not explain the differences in the contracts during 2016 but it did shed light on Argon’s position.
According to Alain Pelletier, the vice-president of marketing at Argon 18, the WorldTour team was also allowed to keep bikes and sell them at the end of 2019 in order to recoup some of the contract money that they had agreed to lose.
“I’m not aware of that audit but in 2019 it was the last year of our sponsorship and we renegotiated because we were not in a position to pay what they were asking for in terms of the financial contribution on top of bikes. We ended up, the new CEO at the time, renegotiated the contract at the time. The only other arrangement as that they had bikes that they kept and they sold as compensation.”
The report adds: “From the conversations that we had with Ms Yana Seel on various occasions throughout July until the date of this report, we understand that prior to her appointment as director of Abacanto no inventory of assets has been kept, therefore we cannot confirm which of the agreements is the one that was in force during the years 2017 and 2018. In addition, we have not been able to confirm if and when the sponsoring in kind for the Astana Continental Team and Astana Women Team has been received by the respective teams, nor the bikes returned to at the end of each season.”
There were further question marks over the sponsorship agreement involving the Astana Continental team, which according to the report received finances from Abacanto SA into a company called Kaliri LTD. The report found that an absence of inventory “raises account and governance concerns” and that “conflicts of interest cannot be excluded.”
It appears that there was also a payment to Hublot SA for five watches totalling 62,960 Euros in 2018, yet there was no “commercial rationale” for the payment or authorization that could be identified. Deloitte could not find any evidence of a sponsorship agreement between Hublot and Abacanto, and while Deloitte acknowledged that there had at one time been a public link between with Abacanto and Hublot “the approval of such expense by the shareholder in the annual budget or in any other valid document could not be confirmed so far.” Again, VeloNews reached out to Astana and Vinokourov for a comment. We were simply told that, “for sure, he won’t comment anything of this.”
Vinokourov was specifically named in a section within the report surrounding the use of the private jet flights totalling 498,595 Euros between 2017 and 2018. The report states that “identification of the private jet flights with Alexandr Vinokourov as the main passenger. The approval process for private jet flights could not be confirmed.”
There were also concerns over the use of what the report called “sport consultants.” These appear to be riders agents, with 525,000 Euros paid to a number of individuals between 2017 and 2018. The report stated that “‘the economic rationale could not be confirmed as the parties were already known to each other. Conflicts of interest were identified in that an agent could represent at the same time Abacanto and the rider.”
In these cases it appears as though fees were transferred to agents for contract renewals for riders, rather than riders transferring or moving from rival teams.