Yukos shares continue to fall

Shares in embattled oil firm Yukos have continued to fall amid concerns that its financial collapse may be imminent.

Meanwhile, the European Union has accused Russia's president of trying to ruin the economic empire of Yukos founder Mikhail Khordokovsky.

Yukos lost a fifth of its stock market value in a single day's trading on Monday and its shares fell a further 14% in early trading on Tuesday.

Rouble denominated shares were down to their lowest level since October 2001.


Political campaign

Following news of the slide, European Commission Director General of External Relations Eneko Landaburu accused President Vladimir Putin of carrying out a vendetta against Mr Khordokovsky due to their political differences.

"We interpret this as a decision of President Putin to destroy an economic empire which had certain strategic goals of political influence," he said.

"What's happening here is essentially a settling of accounts."

The on-going case against Mr Khodorkovsky is widely seen as a Kremlin-inspired drive to punish Russia's richest man for funding opposition political parties and to deter him from further political activity.

Yukos has warned it could be driven into bankruptcy after a court ordered it to pay a $3.4bn tax bill.

On Tuesday, a Moscow court upheld an earlier legal decision which froze a number of Swiss bank accounts belonging to the company and its subsidiaries.

Selling out

The court upheld a previous judgment from April, which had ordered the freezing of Yukos's Swiss bank accounts. Swiss authorities subsequently overturned much of the order.

Russia's federal prosecutors will have to petition Swiss authorities to re-enforce the freeze.

This selling is crazy. Someone has decided it is better to sell and get $1m than to get nothing

Andrei Kukk, Uralsib

Yukos shares fell 14% to 105.66 euros in Moscow while, on dollar denominated exchanges, they dropped 15.5% to $3.55.

The company's shares dived 22% on Monday, leading some analysts to argue that the company's chances of avoiding financial collapse were increasingly slim.

Yukos has lost more than half its market value since last Wednesday - one day after state bailiffs announced they intended sell off the firm's main production unit, Yuganskneftegaz, in order to help pay the company's $7bn tax bill.

Yukos executives have expressed fears that the unit, which accounts for 60% of its oil output, could be sold for as little as $1.75bn. Yukos values it at $30bn.

Analysts said that investors who had bought into the company in the hope that it may reach a settlement with the government in its tax dispute were now selling out.

"This selling is crazy," said Andrei Kukk, an analyst from Uralsib.

"Someone has decided it is better to sell and get $1m than to get nothing."

Criminal accusation

Yukos' problems deepened on Monday when an arrest warrant was issued for Leonid Nevzlin, one of its leading shareholders, accusing him of involvement in murder.

Leonid Nevzlin, who is living in Israel, is accused of ordering the killing of a married couple in 2002.

He also is facing charges of attempted murder.

A lawyer for Mr Nevzlin said the charges would be challenged.

Mr Nevzlin fled to Israel shortly before the arrest of the oil giant's former boss, Mikhail Khodorkovsky.

Mr Khodorkovsky is currently on trial on charges of fraud and tax evasion.

The court in Moscow's Basmanny district said the alleged killing and attempted murders were organised by Yukos's former head of security, Alexei Pichugin, on the orders of Mr Nevzlin, Interfax reported.

Mr Nevzlin is estimated to have a personal fortune of $2bn (£1.1bn), according to Forbes magazine.

He arrived in Israel last autumn as legal proceedings against Yukos were intensifying and was granted Israeli citizenship.

However, authorities in Israel have previously said that Mr Nevzlin's new citizenship would not automatically prevent his extradition to Russia.



HERE