World News

TCS founder Tinkov discloses leukemia fight amid US tax charges; shares slide

By Alexander Marrow, Tom Balmforth and Tatiana Voronova

MOSCOW (Reuters) – Russian businessman Oleg Tinkov, the founder of TCS Group <TCSq.L>, said on Friday he was battling acute leukemia, a day after the U.S. Department of Justice said it was charging him with filing false tax returns.

Shares in the London listed group slid by as much as third after both announcements and were still down more than 22% by 1629 GMT.

Tinkov, who said the illness was diagnosed in October, could face a maximum of six years in prison if extradited to the United States.

In emailed comments provided by his spokesman, he said that he had decided to disclose his illness because of the speculation surrounding his absence from public view amid the legal proceedings.

TCS is the parent company of Tinkoff Bank, a pioneer of online banking technology with more than 10 million customers in Russia and the country’s second-largest credit card issuer after market leader Sberbank <SBER.MM>.

Tinkov allegedly concealed $1 billion in assets and incomes when renouncing his U.S. citizenship in 2013, the justice department said in its statement.

It said he faces two counts of making false tax claims, both of which carry a maximum sentence of three years.

Tinkov said he would focus on his main battle, referring to his health, having hired lawyers to deal with the U.S. tax issues. He said he stepped back from the day-to-day management of the business a couple of years ago.

The Justice Department indictment alleges that following TCS’ initial public offering (IPO) on the London Stock Exchange in October 2013, Tinkov “beneficially owned more than $1 billion worth of the bank’s shares.”

Tinkov, who was naturalized as a U.S. citizen on Sept 10, 1996, renounced his citizenship shortly after the IPO without reporting the constructive sale of his worldwide assets to the U.S. Internal Revenue Service (IRS), the indictment said.

The justice department said its international affairs department was assisting with his extradition.


Tinkov has described previously how he decided to found TCS Group while visiting his friend and Virgin Group chairman Richard Branson’s private island in the British Virgin Islands in 2005.

Known for his eccentric behavior and sometimes provocative public comments, often via social networks, Tinkov commands the attention of market players as he still owns a 40.4% stake in the group.

“The indictment increases the risk that Oleg Tinkov will be forced to sell his TCS shares,” BCS Global Markets said in a note.

At current market value, Tinkov’s stake is worth $1.8 billion, according to Reuters calculations.

Tinkov was arrested in London last week in connection with the indictment, but TCS said he was released on bail and was expected to remain in London while taking part in court hearings initiated by the IRS.

(Reporting by Tom Balmforth and Alexander Marrow, additional reporting by Tatiana Voronova; Writing by Maria Kiselyova and Alexander Marrow; Editing by Kim Coghill/Katya Golubkova/Elaine Hardcastle/Kirsten Donovan)