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The Guardian: Bailiffs close in on Yukos

The Guardian: Bailiffs close in on Yukos

“BP and Shell have large stakes in Russia”

Jailed oligarch’s offer to help meet £1.8bn demand with personal shareholding fails to avert crisis

Carolynne Wheeler in Moscow and Terry Macalister

Thursday July 8, 2004

Bailiffs moved in on Russia’s largest oil firm, Yukos, last night despite a last-ditch plea to the Kremlin by its largest shareholder, Mikhail Khodorkovsky. The jailed billionaire asked the state to take his shares to pay a massive tax bill and save the company from bankruptcy.

Yukos, facing a midnight deadline to meet a £1.8bn demand for 2000, conceded it was impossible to pay the bill without help from the government.

British foreign secretary Jack Straw issued a coded warning to the Russian government about the potential damage to investment created by the current state of uncertainty. Failure at Yukos could further dent economic confidence, already being hit by fears about the banking system.

The Russian justice ministry revealed that bailiffs had begun “enforcing the court decision”, and launched criminal proceedings accusing Yukos of obstructing enforcement of the court order.

Law enforcement officers accompanied by interior ministry troops searched the office of Yukos’s registrar in Moscow and seized the contents of oil company managers’ safes.

Yukos also faces a £1.78bn tax bill from 2001, with the tax ministry warning that addit ional bills for unpaid taxes in 2002 and 2003 may yet be levied.

Mr Khodorkovsky, in jail since October and now on trial on charges of fraud and tax evasion, issued a statement through his lawyer, Anton Drel, asking Yukos’s board of directors to use principal shareholders’ stakes to settle the tax claims.

“Khodorkovsky also asked the board of directors not to declare the company bankrupt,” the statement read.

Mr Straw used a joint press conference with his Russian counterpart, Sergey Lavrov, to press the case for a peaceful settlement. “Britain is the largest single investor in the Russian federation and I know that Mr Lavrov and the whole of the Russian government appreciate the need for there to be a predictable and stable climate for this foreign investment to continue,” he said.

Later he revealed that “the matter is being monitored carefully” by the British embassy in Moscow. “We have some direct British interests in this,” he added, noting that some Yukos shareholders were from the UK. BP and Shell have large stakes in Russia.

Yukos’s fortunes have tumbled and soared on the market this week amid contradictory statements from Russian officials. Deputy finance minister Sergei Shatalov suggested on Tuesday that Yukos could get more time to pay the bill, and President Vladimir Putin has said that Yukos’s bankruptcy is not in Russia’s best interest. Yukos shares rose 13% yesterday.

Prosecutor general Vladimir Ustinov warned, however, of more tax bills to come and called on Yukos’s shareholders to rescue the company by paying the demand.

There have been increasing rumours of a looming banking crisis, fuelled this week by the temporary closure of Guta Bank, Russia’s 22nd-largest lender, and reports that $100m (£54m) had been withdrawn from the country’s third-largest bank, Alfa, in the past week.

Central bank chairman Sergei Ignatyev insisted yesterday there was no crisis in the banking system.,3604,1256398,00.html

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