Wednesday, BikeNews published new revelations regarding the criminal investigation in Luxembourg involving the paying agent and licensee of Astana Qazaqstan, Abacanto SA. The investigation is focusing on allegations of misuse of corporate assets, breach of trust, fraud and money laundering, with a potential criminal trial on the horizon if the current investigating judge finds that there is enough evidence.
As team boss Alexander Vinokourov tried to distance himself from the investigation, saying BikeNews that he is not involved, an independent report which was commissioned in 2o19 raised serious questions about the financial dealings of Abacanto SA with huge sums of money missing in contract spreads, the use not accounted and unapproved of private jet travel, and more than 500,000 euros paid in “consulting fees” for riders’ agents.
The report was initiated by Yana Seel, who was the team’s general manager at the time. Currently at Lotto-Soudal, Seel had no comment when approached by BikeNews regarding Deloitte’s findings, but it is clear from the nearly 60-page document that it felt it was necessary for an independent body to audit and advise on the expenditures of Astana and Abacanto SA between the years 2017 and 2018.
On Wednesday, Vinokourov released the following statement for BikeNewsbefore the publication of this story.
“To be honest, I learned about this whole story from the press, and until then I was not aware of 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 general manager of Abacanto SA, while I was carrying out purely sporting duties until the summer 2021. Officially, after a break, I returned to work with the team in January 2022, so it is difficult for me to comment on anything on this matter.
Deloitte’s findings were published in an internal, confidential report on October 7, 2019. According to the report, Seel raised concerns about the use of funds within the team almost as soon as he joined Abacanto SA.
The report stemmed from a memorandum from the Belgian legal adviser to Abacanto SA, a document which raised concerns.
Deloitte and its 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 to fully understand Abancanto’s working practices. HER.
According to the report, there were several red flags.
To begin with, Deloitte found that there were “multiple signed versions of contractual agreements with the same signing date with related identified payments that did not match.” These referred to documents between Abacanto and their bicycle supplier at the time, Argon 18. Deloitte added that “the quality of the signatures does not appear 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 an unclear vendor selection process; material expenses for which the commercial selection rationale remains unclear; significant travel expenses for which no authorization process could be identified; and that the name of the former signer of the Company’s bank account was mentioned in a news article about an alleged case of money laundering and tax evasion.
The report also said the extent of past management powers given to Vinokourov and related responsibilities remained unclear at the time of publication.
The initial summary adds that: “Our work has revealed serious issues which are extensively documented in the report.”
The report begins with discrepancies in financial reporting around the contract between Abacanto SA and Argon 18, which supplied bikes to Astana between 2017 and 2019. According to the report, two versions of the sponsorship deal, both signed at the same time in 2016, showed discrepancies between them, and that the payments identified were lower than those mentioned in the agreements. The report also states that “the quality of signatures does not appear to be identical between the agreements, raising questions about the authenticity of any of the agreements”.
In a contract, a value of €6.4 million over three years (640 bikes at €10,000 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 but specified the same number of bikes (64) as well as additional financial support of 3.6 million euros over three years. The full value of the contracts was never paid, which may have been due to Argon’s weak finances at the time.
BikeNews asked Vinokourov – via an Astana press officer – about the discrepancy between the two contracts. We were told almost immediately that Vinokourov would not comment.
BikeNews also contacted Argon 18 and the Canadian bike brand said that as the final year of the three-year term with Astana approaches, a renegotiated contract has been put in place due to the bike supplier’s financial insecurity . It wouldn’t explain the differences in contracts in 2016, but it would shed some light on Argon’s position.
According to Alain Pelletier, 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 recover some of the contract money they had agreed to lose.
“I am not aware of this audit but in 2019 it was the last year of our sponsorship and we renegotiated because we were not able to pay what they were asking for in terms of financial contribution in addition to the bikes We ended up, the new CEO at the time, renegotiating the contract at the time, the only other arrangement being that they had bikes that they kept and sold as compensation.
The report adds: “From conversations we had with Ms. Yana Seel at various times throughout July up to the date of this report, we understand that prior to her appointment as Director of Abacanto, no inventory of assets has been kept, so we cannot confirm which of the agreements is the one that was in effect during the years 2017 and 2018. Furthermore, we have not been able to confirm whether and when the in-kind sponsorship for the Astana Continental Team and the Astana Women’s Team has been received by the respective teams, nor the bikes collected at the end of each season.
There were further question marks over the sponsorship deal involving the Astana Continental team, which the report said received funds from Abacanto SA in a company called Kaliri LTD. The report found that a lack of inventory “raises account and governance issues” and that “conflicts of interest cannot be ruled out.”
There also appears to have been a payment to Hublot SA for five watches totaling €62,960 in 2018, but there was no “commercial justification” for the payment or authorization that could be identified. Deloitte could find no evidence of a sponsorship agreement between Hublot and Abacanto, and while Deloitte acknowledged that there was at some point a public link between with Abacanto and Hublot “the approval of such expenditure by the shareholder in the annual budget or in any other valid document could not be confirmed so far. BikeNews contacted Astana and Vinokourov for comment. We were simply told that “of course he won’t comment on any of this”.
Vinokurov was specifically named in a section of the report regarding the use of private jet flights for a total of 498,595 euros between 2017 and 2018. The report states that “the identification of 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 about the use of what the report called “sports consultants”. They would be agents of riders, with 525,000 euros paid to several people between 2017 and 2018. The report indicates that “the economic justification could not be confirmed because the parties already knew each other. Conflicts of interest were identified insofar as an agent could represent both Abacanto and the rider.
In these cases, it appears that fees were passed on to agents for riders’ contract renewals, rather than riders transferred or transferred from rival teams.