Police raid Yukos office as oil giant pins hopes on US court to stop sale of core asset

Russian police raided the office of Yukos and questioned a company executive, Interfax news agency quoted the general prosecutor's office as saying, a day after the ailing oil giant filed for voluntary bankruptcy in a US court.

The police search was carried out "as part of the criminal investigation," the spokesman for the prosecutor's office was quoted as saying.


"Right now, Anton Zakharov, head of the executive department, is being questioned," he added.

Yukos spokesman Alexander Shadrin refused to comment on the case but Interfax quoted a source close to Yukos in London as saying the raid and the questioning of the official did take place.

"We do not know in what capacity he is being questioned, for what case and for what reasons. The investigators did not allow Zakharov to have a lawyer, which shows a disregard for the law," the source added.

Last week, two Yukos jurists had already been arrested.

Yukos was hoping Thursday that a US district court in Houston, Texas, would grant its request for bankruptcy protection, scaring off Western banks planning to finance a Russian state-directed takeover of its main asset.

Bankruptcy Judge Letitia Clark requested further information and ordered all the parties in the case to show up at a second hearing Thursday.

The battered company, reeling from billions of dollars in tax demands and imprisonment of its owners, said a ruling in its favour would open the gates to legal action against a syndicate of Western banks financing a bid by state-controlled gas giant Gazprom.

"Since we maintain that this asset is being sold illegally, those who buy it and anyone who assists in financing this acquisition are putting themselves at serious legal risk," Yukos spokesman Alexander Shadrin told AFP.

"Firstly in terms of lawsuits by the company and secondly from Yukos minority shareholders," he added.

Russian newspapers described the eleventh-hour US legal appeal as a "desperate attempt" to halt the auction that would not deter the Kremlin and the state-appointed gas bosses at Gazprom, a near-monopoly, from putting Yugansk under the hammer.

But they said it could frighten the multinational banks led by Germany's Deutsche Bank, and which include US financial giant JP Morgan, Dutch ABN Amro and France's BNP Paribas, who are lending Gazprom 10 billion euros (13 billion dollars).

Yukos chairman Viktor Gerashchenko, a former Soviet-era central banker appointed several months ago in a failed bid to strike a compromise with the government, confirmed to the Kommersant daily that the banks were the principal target.

"The US court decision could have an impact on the syndicate of Western banks that is planning to provide credit for the Yuganskneftegaz deal. They all have operations in the United States," he said.

The Russian government plans to auction off Yukos' Siberian oil-production subsidiary on Sunday, raising at least 8.65 billion dollars to pay down the corporation's tax debt.

Yugansk accounts for 60 percent of the oil pumped by Yukos.

Analysts said the threat of legal action would not worry Gazprom, which has few business interests in the United States, and could raise alternative funds from state-run Russian banks and by bringing in another partner.

And even Yukos's jailed billionaire founder Mikhail Khodorkovsky said that he did not believe the US bankruptcy appeal would save the company from being broken up by the Russian state, with whom he had clashed over his business and business ambitions.

"It upsets me to see this outcome," Khodorkovsky said Thursday in a statement released by his lawyers.

The foreign managers and directors of Russia's top oil producer had "done more than one could have expected to save the company and now they are already protecting their personal reputation," he said.

"This of course will be of no help to the shareholders," Khodorkovsky added.

The Russian government has been dismantling Yukos for more than a year now, raiding company offices, arresting Khodorkovsky at gunpoint and slapping the firm with huge tax bills, totaling 27.5 billion dollars according to a Yukos accounting statement released Thursday.

India's state-run Oil and Natural Gas Corporation meanwhile Thursday stated its interest in bidding for some of the assets of Yukos.

ONGC is believed to have held talks with Gazprom for a possible joint bid for a portion of Yukos' assets, providing another source of financing.

(AFP via Channel News Asia, 12.16.2004)