Owner of Yukos Criticizes Schroeder

The majority owner of embattled Russian oil company Yukos on Tuesday called on German Chancellor Gerhard Schroeder to press Russian President Vladimir Putin on his country's handling of the matter when the two leaders meet next week.

Group Menatep managing director Tim Osborne also threatened legal action against potential buyers of the oil company's main subsidiary, Yuganskneftegaz, which is to be auctioned off by the government on Sunday to meet Yukos' multibillion-dollar back-tax bill.

Schroeder "seems to turn a blind eye to human rights in Russia and the rule of law," Osborne said. "It's a shame that Schroeder is meeting with Putin next week. We hope he speaks with Putin about it."

Osborne said his group would "try to get recompense" for his shareholders in a court outside of Russia after Sunday's auction. He accused Russia of ignoring the rights of tax claims, by choosing to auction off the subsidiary immediately rather than start off with available cash and other assets.

Yuganskneftegaz's proposed starting price of US$8.6 billion (euro6.6 billion) is lower than even the most conservative valuations commissioned by Western investment banks. It appears to confirm investors' fears that the unit, which produces about 60 percent of Yukos' oil, could be sold to Kremlin-friendly hands for a fraction of its value.

Group Menatap ran an ad in the Financial Times on Monday saying that "full legal redress will be sought from any company which acquires the shares, facilitates the purchase or deals with Yuganskneftegaz's oil or gas."

Osborne has been meeting with reporters in Europe this week to make sure his company's side of the case is heard.

Group Menatap was created by jailed former Yukos chief executive Mikhail Khodorkovsky, and controls about 60 percent of Yukos. Khodorkovsky is being tried in Russia on charges including fraud and tax evasion.

The group has already filed an arbitration claim under the auspices of the Energy Charter, an international treaty that establishes a legal framework to protect investments in the energy sector.

(AP via Forbes, 12.14.2004)