The Banks Files: How Brexit ‘bad boy’ Arron Banks was eyeing a massive Russian gold deal

Millionaire Brexit backer Arron Banks eagerly pursued a multibillion-pound gold deal brought to him by a Russian oligarch with links to the Kremlin just months before the EU referendum, Channel 4 News can reveal.

Business associates of the self-styled “bad boy of Brexit” offered to oversee a plan to create a massive new Russian gold company, and tried to arrange a personal meeting in Moscow with key players from a state-owned Russian bank.

Mr Banks has denied that he sought to pursue investments in Russia and played down his contacts with Russian officials.

MPs from the Digital, Culture, Media and Sport committee said last year that he had given more than £8m to the Leave campaign – the biggest political donation in British history – but had “failed to satisfy us that his own donations had, in fact, come from sources within the UK”.

Banks, who has backed Ukip, Leave.EU and other Eurosceptic groups is now being investigated by the National Crime Agency over the source of his political donations.

A Channel 4 News investigation can reveal for the first time how a finance company substantially owned by Banks drew up a business pitch for a Kremlin-linked oligarch called Siman Povarenkin to merge six Russian gold miners into a single company.

Five months before the referendum, the finance company suggested that Banks travel to Russia to meet executives at state-owned bank Sberbank to hurry the deal along.

Associates of Mr Banks even identified a shell company, based in Sweden, to be used as a vehicle for the deal.

Russia experts have told Channel 4 News that the document suggests Mr Banks and his associates expected the funding to come “one way or another from the Russian government”.

Under Mr Putin’s presidency, the Kremlin has been accused of backing Brexit and launching covert operations to affect the outcome of national elections in the US and elsewhere.

A former British intelligence official said the approach to Mr Banks had the hallmarks of a Russian influence operation.

Arron Banks told Channel 4 News he rejected potential investment opportunities in Russia, and said Brexit campaign funds came from him and other UK-based donors.

Golden opportunity

In an interview with ITV News, Mr Banks was asked: “Did you ever invest in Russia? Did you go further and have more meetings about this?”

He replied: “No. Flat. Zero. Nothing. In fact, I wouldn’t do. Because I know it is a complicated place to do business.”

Channel 4 News has seen emails and documents that reveal Mr Banks attended a 2015 meeting with Russia’s ambassador to the UK, Alexander Yakovenko, and Mr Povarenkin, a mining entrepreneur closely connected to Vladimir Putin.

Mr Povarenkin wanted his company GeoProMining to buy six other small Russian gold companies to create a new firm similar in size to the country’s largest gold producer.

On November 18, 2015, Mr Banks thanked Mr Povarenkin for the proposal and said he had passed it on to Andrew Umbers of Oakwell Capital, “a company I own a substantial stake in”.

On January 12, 2016, Mr Umbers sent Mr Povarenkin a detailed document which stated: “Oakwell Capital, through its corporate finance arm, would be extremely interested in overseeing the entire project on behalf of its prospective client GeoProMining.”

The document – entitled Consolidation of Russian Gold – has never been revealed until now.

It put the cost of buying up the companies at around $4bn, saying: “The source of this cash is as yet unclear but it is assumed that would be made available through friends of GeoProMining and provided in concert with Sberbank’s bank debt support.

“We would therefore recommend a confidential meeting with Sberbank at the earliest possible convenience to understand their strategy and motive.”

Days later, Mr Umbers followed up with an email to Mr Povarenkin asking “whether you could arrange for us (Arron and I) to meet the appropriate Sberbank decision-maker and perhaps in Moscow if it is appropriate?”

The email noted that Russian government-owned Sberbank was a major lender to all six smaller gold companies and said Mr Banks wanted to know “the scope of co-operation from Sberbank and “the financial muscle (person/institution) behind the deal”.

‘Political bribery’

Anne Applebaum, a leading expert on contemporary Russian politics, told Channel 4 News: “That says to me that they expect the funding to come one way or another from the Russian government.”

She added: “Arron Banks doesn’t go to a meeting with the Russian Ambassador and receive a series of Russian contacts and be offered a deal that seems to have Russian state-backed funding and then hide it because it’s a normal deal.

“No these are not normal deals, these are forms of political bribery.”

Mikhail Khodorkovsky, an exiled Russian businessman and leading Putin critic, said: “If we talk about the Kremlin and Putin’s entourage then it is usual for them to siphon money or services through intermediaries and receive a preferred political decision as a result.”

Mr Khodorkovsky, who was thought to be Russia’s richest man, but was jailed for fraud by the Russian government, added: “In this particular case they’re interested in Brexit.

“There is no doubt that the Russian government is aware of everything that happens with the Russian Ambassador involved.  It would be strange if that was not the case.”

Sir David Omand, the former director of the British intelligence agency GHCQ, said: “If you look at the history of information operations you do see that they [Russia] seek agents of influence who will help them, achieve – sometimes knowingly, sometimes unknowingly – advance pieces of policy who may not realise they are being used as tools.”

Alexander Yakovenko, Russia’s ambassador to the UK

Extensive contacts

Mr Banks initially said that his only involvement with the Russians was a “boozy six-hour lunch” with Mr Yakovenko, the Russian ambassador, in 2015.

But emails and documents show that Banks was first invited to lunch by Alexander Udod, a senior staff member at the Russian embassy later expelled for suspected spying after the Salisbury poisoning incident.

The invitation came in November 2015, when the EU referendum bill was passing through parliament, but before the date of the vote was announced.

Mr Banks accepted the invitation personally and said: “There is massive interest in the referendum in the USA as well, and we are shortly visiting Washington to brief key (…) on the campaign.”

Emails and documents seen by Channel 4 News show that Banks received invitations to at least two other lunches with the ambassador and a string of drinks events and parties at the Russian embassy and residency in London right up to the summer of 2017.

During this time, he was in regular contact with key figures in Donald Trump’s presidential campaign, and visited Mr Trump at Trump Tower shortly after his election victory.

Arron Banks told Channel 4 News: “Channel 4 News allege that business deals done with Russia funded our Brexit campaign, either directly or indirectly. I have repeatedly stated that was not that case and that potential investment opportunities were assessed and rejected at the time.

“The so-called Russian “sweetheart” gold consolidation play was referred to Lord Guthrie, former head of the British Army, who referred us to a Russian gold expert – Peter Hambro, otherwise known as “Goldfinger”.

“We had one short meeting about the potential project and then rejected it. The funding of our Brexit campaign came from myself and other UK-based donors. I look forward to the NCA report in due course.”