Freeze Is Upheld on Yukos Subsidiaries

A Russian court on Thursday rejected an appeal by the Yukos oil company seeking to overturn a freeze on the accounts of the struggling oil giant's core subsidiaries.

Bailiffs are collecting some $7.5 billion in back taxes from Yukos, while its main production unit — Yuganskneftegaz — was recently slapped with a nearly $1 billion claim for 2002.
Despite multiple appeals to the government, Yukos has been unable to broker a deal to spread out its tax payments. With its bank accounts frozen and an asset freeze in place, the company has repeatedly warned it might run out of money.
Yukos' future and concerns over possible supply interruptions have been among the factors behind record-high world oil prices.
The Moscow City Court's decision to uphold the freeze at subsidiaries Yuganskneftegaz and Tomskneft was the latest in a series of legal defeats for the company in what is seen as a politically charged case. The freeze was imposed at the end of August at the request of prosecutors as part of the 2000 and 2001 tax claims.
Representatives of Yuganskneftegaz are due to meet with officials from the Natural Resources Ministry on Friday to discuss a possible recall of its subsoil licenses.
The unit, which produces 60 percent of Yukos' oil, is being evaluated for sale by the state and could see its value tumble if the licenses are revoked in conjunction with the new 2002 tax bill. That would increase the chances of a sale to a Kremlin-friendly company, observers say.
The government has portrayed Yukos' legal woes and the separate charges facing its jailed former CEO Mikhail Khodorkovsky as punishment for abusive tax and bookkeeping practices.
But critics allege the investigation is really about punishing Khodorkovsky for his political ambitions, and rewarding Kremlin allies.