Yukos suffers court setback

Yukos has suffered a fresh setback in its survival struggle against multi-billion-dollar tax bills after one of its appeals was thrown out and another adjourned by a Moscow court.

The Interfax news agency has said the Russian Arbitration court refused to unfreeze shares of Yukos's main Siberian oil producing unit Yugansk, which accounts for 60 per cent of the company's output.

Yukos must pay $3.4 billion (£1.87 billion) in back taxes for 2000 by August 30, something the firm says it cannot do as it is banned from selling assets to raise cash and can only generate $1.7 billion by the deadline.

Interfax said the court separately adjourned to September 7 Yukos's appeal against the bill for back tax for the year 2000 -- the latest in a string of largely unsuccessful appeals the oil giant has made ahead of an August 30 deadline to pay.

Yukos's troubles are part of a broader judicial campaign, seen by most analysts as orchestrated by the Kremlin to punish the firm's politically ambitious founder Mikhail Khodorkovsky, who is on trial on charges of fraud and tax evasion.

Industry analysts are increasingly convinced that the Kremlin is determined to break up Yukos and are now focusing on how quickly it will implement threats to sell Yugansk.

HERE