JCB built and supplied equipment to Russia months after saying exports had stopped

The British digger maker JCB, owned by the billionaire Bamford family, continued to build and supply equipment for the Russian market months after saying it had stopped exports because of Vladimir Putin’s invasion of Ukraine, the Guardian can reveal.

Russian customs records show that JCB, whose owners are major donors to the Conservative party, continued to make new products available for Russian dealers well after 2 March 2022, when the company publicly stated that it had “voluntarily paused exports” to Russia.

The data raises questions about the accuracy of JCB’s statements on its business in Russia and relationship with its biggest dealer there, Moscow-based Lonmadi, and that company’s former owner, UK-based JVM group.

JCB has repeatedly said that it stopped exporting products to Russia and JVM companies after 2 March 2022 less than a week after Putin sent troops into Ukraine.

However, customs records collated by a trade data provider show the serial numbers of dozens of vehicles, worth millions of pounds, which appear to have been supplied to companies in Russia after that date.

When the Guardian presented a sample of those records to the Staffordshire-based manufacturer, it admitted that JVM continued to collect diggers from JCB’s factories for months after the voluntary pause, but said that was due to contractual obligations.

JCB also confirmed that the manufacturing of some of the equipment continued after that date.

JCB’s lawyers said: “Any collection of goods by a JVM company after 2 March 2022 was pursuant to contractual obligations already entered into and completed or substantially completed prior to that date.”

The company also denied any inconsistency or inaccuracy in its public statements.

JCB’s chair, Anthony Bamford, 78, is one of the UK Conservative party’s biggest donors and a close ally and financial backer of the former prime minister Boris Johnson.

Lord Bamford was made a Conservative peer in 2013, before retiring in March. The business was founded by Bamford’s father, Joseph Cyril Bamford, and according to the Sunday Times rich list the family is worth £5.9bn.

Boris Johnson and Lord Bamford (right) at JCB’s factory in Vadodara, Gujarat. Photograph: Ben Stansall/AFP/Getty Images

JCB, one of the biggest privately held businesses in the UK, has 22 factories around the world, including in India and China, and had a sizeable presence in Russia at the time of the invasion in February 2022.

The Bamford family’s business dealings have also come under scrutiny in recent months after the Guardian reported that Lord Bamford and his brother, Mark, could be hit with a bill for more than £500m to settle a long-running tax investigation by HM Revenue and Customs.

Shipments to Russia

JCB sells its products all over the world, but a significant – albeit unquantified – proportion of its sales came from Russia before the Ukraine invasion. After the invasion Bamford said, via lawyers, that he fully supported the UK government’s position on Russia. JCB’s lawyers said the company took “voluntary steps to pause the manufacture and supply of new orders to Russia from 2 March 2022” – a time when no relevant sanctions were in place.

The company said it also closed down an assembly facility and other business operations in Russia, at considerable cost, and “suffered a very significant economic loss” through its voluntary actions. It also offered to house 70 Ukrainian refugees in company homes in Staffordshire.

JCB’s business in Russia increased through a partnership with Lonmadi and JVM, which was owned by a Briton, Max Skillman. Trading under the Lonmadi and Kwintmadi names, the dealership grew to employ more than 1,000 people, mainly in Russia, and briefly propelled Skillman into the ranks of Britain’s wealthiest businesspeople. JCB’s sales in Russia continued to expand after Russia’s invasion of Ukraine’s Crimea region in 2014.

In July 2022, the Observer revealed that Lonmadi was dealing with a subsidiary of Gazprombank, an arm of the Russian gas company and which was and remains under UK sanctions. A lawyer for Skillman said at the time that he had not broken any sanctions laws.

Approached recently by the Guardian, Skillman said via his lawyer that JVM had divested itself of “all of its beneficial interest in Lonmadi and of any involvement in its management or operations” on 4 April 2022.

JCB has also repeatedly said that it has cut ties with Russia. In July 2022, JCB’s lawyers told the Observer that all exports to Lonmadi and JVM had stopped after 2 March 2022. They wrote: “JCB has not since that date supplied any machinery to the dealer”, referring to JVM. They added: “Any JCB machinery that the dealer may have sold since March 2022 is stock that it already had in its possession before that date, over which JCB has no control.”

After initial inquiries by the Guardian in February this year, lawyers for JCB reiterated that position, and said: “JCB ceased operating its dealer relationship with JSC Lonmadi in March 2022.”

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However, the collated customs data suggest that shipments from JCB factories continued to arrive with Lonmadi after that point, including 128 in July 2022 alone. A further 27 shipments arrived with Lonmadi on 9 August 2022, the data suggests – a month after the Observer asked JCB about its relationship with Lonmadi.

A screenshot of a JCB database, showing a product that, collated customs data suggests, was shipped to Russia on 9 August 2022. The website showed a ‘build date’ of 29 April 2022 for the digger, before public access was revoked. Photograph: J.C. Bamford Excavators Limited

For instance, the customs records suggest that one of those products, a JCB 205 skid steer digger, arrived for Lonmadi in Russia on 9 August 2022. A database on JCB’s website listed a “build date” for the digger of 29 April 2022. The vehicle’s serial number, which tallies with the customs data and JCB’s database, suggests it was built in JCB’s factory in Rajasthan, India. Public access to JCB’s database has been restricted since the Guardian’s inquiries.

JCB’s lawyers confirmed that the digger was ordered by JVM in 2021. They said manufacturing of the digger started on 24 February 2022 – the exact date that Russia launched its full-scale invasion of Ukraine – and was completed on 28 March 2022, weeks after the voluntary pause on exports was announced.

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In another case confirmed by JCB, manufacture in China of a digger ordered by a smaller Russian dealer in 2021 was completed on 7 March 2022, five days after the voluntary ban.

The customs records suggest it arrived in Russia five months later. The company’s lawyers also confirmed that other JCB products that appeared in the data were collected from its Shanghai factory in July 2022. They said the orders were made before 2 March 2022, and that a Covid-19 lockdown in Shanghai may have been to blame for the delay.

The collated customs data was sourced originally from bills of lading legal trade documents which are recorded on Russia’s electronic customs database. The data gives granular details about the extent of JCB goods that entered Russia, including commodity codes used to classify cross-border trade, serial numbers and a Russian-language description of the product. The Guardian was able to cross-reference dozens of the serial numbers using JCB’s own online maintenance database.

‘No direct role’

JCB admitted, via its law firm Schillings, that it continued to make its products available to JVM for months after 2 March 2022, which it said was in order to fulfil contracts that had been entered into before the invasion. The lawyers said that a customer’s collection of a product from its factory in relation to a contract that had been entered into prior to 2 March 2022 did not amount to exporting products to Russia after that date, or taking action contrary to its statements.

They argued that Russia’s invasion of Ukraine was not suitable grounds for “frustration or termination” of its contracts with dealers, because the invasion did not make it impossible or illegal for it to fulfil its contractual obligations.

JCB also challenged the veracity of some of the data, with its lawyers saying that the data “appears to merely record shipment of a product manufactured by our client”. The lawyers added: “It does not demonstrate that our client had any direct role in facilitating the export of those products into Russia and even less so that it in any way financially benefited from those alleged exports.”

JCB’s lawyers said that the data provided to them by the Guardian did not demonstrate that there has been any inconsistency or inaccuracy in their public statements. They also said that most of the examples cited by the Guardian were contracts with “non-Russian dealers”, which are not restricted by either JCB’s policy or by sanctions.

Skillman, via his lawyer, said he does not have access to the operational records of the JVM companies, which are no longer trading, and declined to comment further or answer the Guardian’s questions.

Lonmadi also declined to answer questions, but said that the company no longer has a business relationship with Skillman.

The Guardian

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