Yukos gets two weeks' relief in tax case

Yukos, the Russian oil group won more time to clinch a life-saving deal with the state on a $3.4bn back tax claim after a court said on Friday it needed two more weeks to make a ruling.

Yukos has repeatedly said any prompt decision by a court to pay taxes immediately would sink the company, whose assets are frozen. It has offered to enter talks with the government on paying the bill by selling assets to state energy firms.

The company, whose main owner Mikhail Khodorkovsky went on trial on fraud and tax evasion last week in what is seen as a Kremlin ploy to punish the billionaire for political activities, also said it was ready to buy the shares from jailed tycoon.

"I will consider the [tax] case for two weeks," tribunal chairman Valery Korotenko told a court hearing.

Together with the adjournment of Khodorkovsky's trial to July 12, a window has opened for possible talks on a settlement.

Yukos shares rose nearly 1 per cent on the MICEX exchange at 0800 GMT, outperforming the broader weaker market.

On Thursday, Yukos appointed a new top management duo, bringing in former central bank head Viktor Gerashchenko as chairman and US oil man Stephen Theede as chief executive to replace the outgoing Simon Kukes.

Kukes's overtures to the government on a possible tax deal made little headway, and the company appears to be counting on Mr Gerashchenko's standing as an establishment figure and proven crisis manager to get the ball rolling.

"Kukes was reportedly an irritant to some members of government, and his removal, we think, is another move closer to a resolution of the Yukos affair," said Renaissance Capital oil analyst Adam Landes.

The appeals being reviewed by the Moscow Arbitration Court effectively amount to an attempt by Yukos to overturn the $3.4bn tax claim, while the tax ministry had sought to pre-empt that decision by making its own technical appeal.

The most recent decisions by the court have, however, gone broadly in the company's favour.

The three-judge panel on Thursday threw out a tax ministry petition to have chairman Korotenko removed. It also wants to rule simultaneously on both suits, thus neutralising the tax ministry's pre-emptive appeal.

With that decision now due in two weeks - and the adjournment of Khodorkovsky's trial - attention will focus on if and when the state and Yukos do indeed get together for talks on an out-of-court settlement.


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