Washington concerned over Yukos affair: US ambassador to Russia

MOSCOW : The United States is concerned over the prosecution of the Yukos oil case and the sale of the Russian oil giant's crown jewel, the US ambassador to Russia said, reiterating earlier comments by senior US officials.

The United States "has already expressed its concern over the consequences this will have on the pre-eminence of the law in Russia and the inviolability of private property," Alexander Vershbow told Echo of Moscow radio.

Vershbow's remarks were broadcast in Russian.

Russian prosecutors have investigated Yukos for months in what many in Russia say is a politically driven campaign aimed at punishing the political ambitions of its founder and former chief executive Mikhail Khodorkovsky.

Russian authorities said they would sell Yukos' crown jewel Yuganskneftegaz in order to settle the firm's tax bill, at a price well under that at which it has been valued.

"We have clearly indicated that if Yuganskneftegaz is sold at a very low price, it will undermine confidence in the idea that the rights of private property are respected in Russia," Vershbow said.

The Yukos affair was crucial to determine Russia's attractiveness to foreign investors, he added.

Russia's justice ministry last month put a value of just 10.4 billion dollars on the main Yukos production unit Yuganskneftegaz -- a Siberian facility that pumps 62 percent of its oil and had been valued by the company itself at up to 30 billion dollars.

The justice ministry's valuation was the lowest figure mentioned in the independent valuation report the government commissioned from Dresdner Kleinwort Wasserstein (DrKW), which instead suggested a valuation closer to 17 billion dollars.

But the ministry then set the minimum bidding price for a 77 percent stake in Yuganskneftegaz at 3.73 billion dollars.

Some analysts said the ministry's low valuation confirmed fears that the Kremlin was plotting to split up the country's richest oil corporation among rivals that keep to good terms with the state -- the first step toward the creation of a super government-controlled oil giant.

Russian authorities Monday hit Yukos with a battery of fresh tax claims which could see the firm's total debt soar to an astronomical 17 billion dollars.

Yukos founder Mikhail Khodorkovsky has been in jail for over a year and is facing 10 years in prison if convicted of seven charges of fraud, tax evasion and embezzlement.

A.F.P.

(From ChannelNewsAsia, 08.11.2004)