A SCOTTISH firm is at the centre of major corruption probe in the former Soviet arms industry.

Ukraine’s elite National Anti-Corruption Bureau or Nabu has accused one of Scotland’s increasingly controversial “tax haven” firms of skimming £1.5 million from the multi- million-dollar export of war planes to Kazakhstan.

Detectives say an Edinburgh- registered Scottish limited partnership (SLP) called Portvilla Trading was paid for acting as a fictitious intermediary on the deal.

They have discovered some of the cash was funnelled through a Latvian bank, Rietumu, which is part-owned by Celtic’s biggest shareholder, Dermot Desmond. There is no suggestion the bank, or Mr Desmond, had any knowledge of the alleged wrong-doing.

The Nabu allegations, part of a major crackdown on corruption in Ukraine, immediately sparked calls from SNP MP Roger Mullin for UK Security Minister Ben Wallace – the politician in charge of MI5 – to order a British investigation into the case.

Mr Mullin, who has campaigned for SLP reform, said the latest revelations were “deeply worrying” and highlighted the transnational nature of the allegations involving a Scottish firm, a Ukrainian exporter, Kazakh importer and the Latvian bank, Rietumu.

He said: “This clearly calls for full investigation. I will be contacting the Securities Minister and asking him to consider a particular review of this case.”

Roger Mullin MP

HeraldScotland: by Roger Mullin, MP for Kirkcaldy and Cowdenbeath

The Ukrainian corruption probe into Portvilla Trading is just the latest to feature a Scottish limited partnership or SLP, a kind of firm whose owners can remain secret, pay no taxes and file no accounts.

Last year The Herald revealed a separate probe into allegations another SLP, Lanarkshire-registered Fuerteventura Inter, was used to skim $2m from the export of aircraft cannon shells from Ukraine to the Middle East.

Ukrainian sources have warned that Scotland has become a popular place for their country’s so-called “arms-mafia”, crime groups with strong links in the nationalised weapons manufacturing industry, to set up front companies.

The latest Ukrainian probe by the elite Nabu investigators centres on an order for two Antonov An-74 military transport aircraft worth a total of $59m placed by Kazakhstan’s National Security Committee or KNB, the republic’s successor organisation to the KGB, with a factory in Kharkiv.

According to papers filed by an investigating magistrate at Solomianka district court in Kiev, the Ukrainian capital, Kazazh officials were unaware of any services provided by the SLP.

Court documents said payments to Portvilla Trading were made to accounts at two banks in Riga, Latvia, including Rietumu.

SLPs are marketed in the former Soviet Union and elsewhere as “zero-tax offshore companies” and sometimes offered as a package with Rietumu accounts.

Neither Mr Desmond nor Rietumu responded to requests for comment. Mr Desmond owns around a third of the bank, which in 2015 was fined for violations of money-laundering rules and is currently contesting French allegations of facilitating tax evasion.

BACKGROUND: Celtic's biggest shareholder Dermot Desmond under pressure on bank ‘money laundering’

Portvilla Trading is registered at a flat in Leith, whose occupants are not accused of knowing anything about the firm’s activities. The SLP’s owners are called Western Admin Ltd and Global Admin Ltd. There was no way to contact these firms.

Green MSP Andy Wightman, who has campaigned against SLPs, said: “These latest revelations show the urgent need to stop the abuses of Scottish Limited Partnerships that appear to be taking place.

"Scotland’s reputation as a place to do legitimate business is being tarnished. I’m pleased that there is to be a UK-wide review but believe Scottish Ministers can take a pro-active approach and I will continue to press them on this.”

Ukrainian Court Documents showing naming Portvilla Trading LP and Rietumu Banka


The only information published at the UK's Companies House on the ownership of Portvilla Trading LP


How The Herald reported previous corruption investigations in to SLPs in Ukraine