Tensions rise in Yukos tax tussle

Tensions are mounting in the stand-off between the Kremlin and oil giant Yukos over a $3.4bn tax bill which could bankrupt the company.
Yukos' hopes of using its 35% stake in rival firm Sibneft to pay its tax arrears have been hit by a court decision to impound some of the shares.

The company has offered to pay $1.3bn towards its tax obligations, which date back to 2000.

But the authorities have so far been reluctant to cut a deal with Yukos.

Yukos' supporters say the government is planning to drive the company out of existence, as part of what is claimed to be a politically-inspired vendetta.


Payment offer

The $3.4bn so far demanded by the government is likely to be only part of the state's overall demands.

In all, the company's tax obligations - the result, regulators say, of the systematic abuse of tax havens - are likely to be at least $8bn, and could be higher if evasion charges for 2002 and 2003 are forthcoming.

Mikhail Khodorkovsky, the billionaire who founded Yukos and is still its biggest shareholder, is currently in prison, facing trial on charges of fraud and tax evasion.

He has reportedly offered to hand over his stake in return for a settlement of the tax case, but the Kremlin has not responded.

On Wednesday, there were also reports that Mr Khodorkovsky was attempting to oust Yukos' chairman, Viktor Geraschenko.

Mr Geraschenko, a former Russian central bank chairman, was appointed to the top job in April in what was seen as a move to placate the government.

Fighting on

Yukos said it would mount a legal challenge against the decision by the Court of Arbitration in Chukotka to appropriate its 15% stake in Sibneft, a legacy of Yukos' attempted merger with Sibneft last year


Mr Khodorkovsky is due back in court on Wednesday
Hugo Erikksen, the firm's director of international relations, said Yukos "was surprised by the decision and will fight it in the courts".

Chukotka province is the regional power base of Roman Abramovich, a major shareholder in Sibneft.

Mr Abramovich has been governor of the region since 2000.

A Sibneft spokesman told Russian news agencies that the decision was consistent with the terms of an agreement earlier this year in which the shareholders of the two oil giants decided to abandon the merger.

Trial resumes

The trial of Mr Khodorkovsky also resumes on Wednesday after a day's adjournment.

Mr Khodorkovsky, who is standing trial alongside close associate Platon Lebedev, is charged with multiple counts of theft, tax evasion, forgery, embezzlement and fraud.

If found guilty, he could face ten years imprisonment in a labour camp and more than $1bn in personal damages.

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