Oil giant Yukos loses tax appeal

Russian oil company Yukos has lost an appeal for more time to pay a $3.4bn (£1.85bn) tax bill.

The company asked the Moscow Arbitration Court to suspend an order forcing it to pay the back taxes for 2000 by the end of August.

Bailiffs are already taking money from Yukos accounts, raising fears that the company may have to stop pumping oil.

The bailiffs' action makes it unclear how the company can continue to pay its operating costs.

Yukos had said the money should not be paid until appeals against the seizure of Yukos subsidiaries have been heard.

Yukos also lost its appeal against the bailiffs' refusal to accept as payment its $4bn stake in Sibneft, the firm with which it had tried to merge in 2003.

Price pressure

The problems faced by Yukos are widely seen as a reflection of government anger at the political ambitions of the company's founder, Mikhail Khodorkovsky - himself currently facing charges of tax evasion and fraud.

The company pumps about 1.7 million barrels of oil a day. Fears that Yukos may be forced to stop pumping oil have contributed to higher global oil prices.

Yukos chairman and former Russian central bank chairman Viktor Gerashchenko has argued that it is in the Russian Government's interest to allow the company to take advantage of higher oil prices.

"I don't expect the company to have any problems producing, refining, and selling oil until the end of September. What will happen when everyone comes back from holiday, I don't know," he told the Reuters news agency on Monday.

The company would delay filing for bankruptcy as long as it could, he added.

His remarks appear to contradict comments by the company's chief financial officer Bruce Misamore, who told the Financial Times newspaper on Monday that the company may file for bankruptcy within days.

HERE