Court ruling leaves Russian Yukos teetering on bankruptcy's edge

Beleaguered Russian oil giant Yukos teetered on the edge of bankruptcy after a court authorised the tax ministry to claim payment of a massive 3.4 billion-dollar (2.8-billion-euro) tax bill.


The ruling, which could enable the seizure of Yukos assets within a matter of days, put intense pressure on Russia's top oil exporter and its shareholders to reach a deal to stave off financial ruin that would likely see it fall into state hands.

"Yukos is surprised and disappointed and we continue to maintain that we have done nothing wrong," spokesman Hugo Erikssen told AFP Tuesday.

The nearly year-long investigation into Yukos and its main owners, including Russia's richest man Mikhail Khodorkovsky who is on trial for fraud and tax evasion, is widely seen as a political campaign to neutralise a powerful Kremlin opponent.


Russian President Vladimir Putin 10 days ago said his government did not want to see Yukos go bankrupt, raising hopes of a negotiated outcome.


The Moscow arbitration court must now draw up a warrant ordering payment of the tax bill, a process which could take up to five days, a lawyer for Yukos, Sergei Pepelayev, told AFP.


"The tax ministry will then be able to demand immediate payment" even if Yukos appeals Tuesday's ruling, and it can set in motion a procedure leading to seizure of company assets, he said.


Yukos, which has said it has only one billion dollars in cash, has warned it cannot pay the bill because of a freeze imposed on its assets and will be forced to declare bankruptcy if it is ordered to pay the claim immediately.


"Theoretically, our frozen assets should automatically have been unfrozen, but we do not know if that is the case," said Yukos's Erikssen.


The new state-linked board chairman of Yukos, former Soviet central banker Viktor Gerashchenko, who was appointed last week in a bid to broker a settlement, said Tuesday he hoped that "common sense" would win the day.


"The company is prepared to pay under certain conditions," the ITAR-TASS news agency quoted him as saying, referring to a plan that Yukos has proposed to the government to settle the debt which would see its top shareholders cede control of the company they created in the mid 1990s.


The plan included a protracted schedule for the taxes owed and a program for transferring ownership in the firm to government-approved shareholders or the state itself -- but it has yet to be endorsed by Khodorkovsky and his fellow shareholders.


The Yukos affair and its overtly political character has unleashed waves of concern among foreign and domestic investors and the government is seen to be anxious to avoid destroying what was one of the country's top blue-chip firms.

The arrest of Khodorkovsky last October and the troubles of his company have been widely seen as Kremlin payback for the tycoon's political ambitions and open defiance of President Putin.

Stephen O'Sullivan, co-head of research at Moscow-based brokerage United Financial Group (UFG), said the only way for the company to stave off bankruptcy was if the main shareholders, who hold their stakes in Menatep Group, surrendered control.

"The tax ministry will be in a position to start seizing assets. The aim is to get Menatep out of the company as a shareholder," he said.

Shares in Yukos fell 4.82 percent to 7.9 dollars, but had suffered most of the losses before the court ruling, which had been anticipated by investors.

"It's not a huge surprise, it was expected. The fate of the company was already decided before," commented Oleg Maximov, oil and gas analyst at Troika Dialog financial house in Moscow.


HERE