Surprise surprise

Russian court rejects oil giant's appeals

Yukos lawyers lost a series of battles Friday to delay proceedings on a $3.4 billion tax claim against the giant oil company, whose founders are being tried on fraud charges.

The Moscow Arbitration Court rejected five appeals by Yukos to postpone hearings on the Tax Ministry's claim, as well as a defense request that the judges be taken off the case for bias.

The court, however, also postponed a crucial ruling that lawyers said would prevent the company from appealing the claim.

The appeals followed President Vladimir Putin's statement that the government does not want Yukos to go bankrupt, a possibility its managers had raised repeatedly, saying the company does not have enough money to cover the claim if forced to pay immediately.

Putin's statement eased investors' concerns that the state is out to destroy Yukos, sending its stock sharply higher.

But many observers predicted that the Tax Ministry will drive its hefty tax claim home to set the groundwork for a deal with the company's owners, led by jailed billionaires Mikhail Khodorkovsky and Platon Lebedev, on yielding control of their assets.

"I think the government's final goal is to ensure that the company will not be bankrupted, but at the same time that today's majority shareholders . . . will not have the controlling stake," liberal lawmaker Mikhail Zadornov, a former finance minister, told Ekho Moskvy radio.

As the court session dragged on, Yukos lost decision after decision, the same results that have plagued Khodorkovsky and Lebedev, who went on trial this week and remain jailed after courts repeatedly rejected their pleas for release on bail or house arrest.

HERE