Russia court turns down Yukos appeal against bailiffs' decision

The Moscow Arbitration Court rejected on Tuesday the embattled oil giant Yukos's appeal against a decision by bailiffs not to use the company's stake in the Sibneft oil company as collateral for the multiUS$-billion tax bill, news agencies reported.

Yukos, Russia's largest oil producer, has been ordered to pay 3. US$4 billion by the end of the month in tax arrears for 2000. It has so far paid some US$790 million.

Yukos has offered to use the 20 percent stake it acquired in its rival Sibneft oil company in a merging deal in payment for the tax arrears. However, the bailiffs refused the offer.

Earlier on Tuesday, the same court also rejected Yukos's appeal to suspend enforcement of tax bill.

The company's US$3.4 billion back-tax bill for 2000 is the first in a series of tax charges on the company levied after a year-long investigation into Yukos, which many critics see as a Kremlin-inspired onslaught against Yukos former CEO Mikhail Khodorkovsky who reportedly sponsored opponents against President Vladimir Putin.

The company faces a similar claim for 2001 and is currently being audited for 2002.

The firm has warned that the tax bill will drive it into bankruptcy and has been trying to seek compromise with the government.

HERE