Yukos CEO Pessimistic About Tax Case Outcome

Simon Kukes, Chief Executive Officer of the Russian oil major Yukos told The Wall Street Journal that he is “not very optimistic” about the outcome of the company’s conflict with the Russian tax authorities. Moreover, Kukes said: “If the [Russian] government wants to make Yukos bankrupt, they can make Yukos bankrupt. Period.”

The conflict between Russia’s second largest oil company and the Tax Ministry is set for a showdown next week with Yukos set to appear in the Moscow Arbitration Court on June 18 for a final hearing. According to Kukes if the company loses its case “in the worst possible fashion… it will generate difficulties and things will accelerate”.

However, the Yukos CEO said that given six to eight months — and the opportunity to sell assets and to restructure itself — the company could raise as much as $10 billion which would be more than enough to pay not only the bill for 99 billion rubles ($3.42 billion) it faces from the tax authorities but also syndicated bank loans worth $2.6 billion that Yukos received last year. Two problems remain, however. One is that Russian law allows the tax authorities to demand payment within a period of several days or weeks of a final court decision. The other — all of Yukos’ assets are currently under arrest and cannot be sold. If the government really decides to bankrupt Yukos all it has to do is to order an immediate payment of tax claims and to forbid the un-freezing of the company’s assets.

HERE