Yukos faces imminent bankruptcy, production shut-down
London, July 5:
About two per cent of the world’s much-needed crude production was nearly shut off at the weekend when a raid by camouflaged policemen threatened to jam vital computer equipment at Yukos, Russia’s biggest oil group. Shares in the company, formerly led by the jailed oligarch Mikhail Khodorkovsky, could plunge again today as investors worry about renewed pressure over allegations of underpaid taxes. Yukos has until tomorrow to come up with nearly 2 billion sterling pounds for the fiscal authorities and failure to do so could push the company into bankruptcy. This could in turn bring a halt to the company’s production of 1.72 million barrels of crude a day and send volatile global oil prices soaring once again. Dozens of policemen burst into the Moscow headquarters of the oil firm on Saturday apparently in connection with a second criminal investigation into the firm’s tax payments in one of Russia’s regions. A spokesman claimed the police raid had interfered with critical information technology networks and ``presented a serious threat’’ to Yukos’s central computer system which controls production across Russia.
``There was a chance that production would have stopped,’’ Alexander Shadrin said by telephone yesterday, warning that continued state actions against the firm meant bankruptcy was a real possibility. Yukos is Russia’s leading exporter. The country vies with Saudi Arabia to be the world’s greatest oil supplier and the Kremlin enjoys the political leverage this gives it in the US and other western oil-dependent countries. Shadrin said during the raid that the police had taken away documents and hard disks that were unconnected to the investigation of their partner firm, Samaraneftegaz, their third largest operating unit. He also said the raid on Yukos’s empty offices was intended to ``frighten’’ the firm, which has persistently petitioned the Kremlin to cut a deal that will enable them to pay off their spiralling tax bill while avoiding bankruptcy. The tax authorities have demanded that Yukos pay 99bn roubles in back-payments for its 2000 bill and last week said it owed them a further 98bn roubles for 2001. Audits for 2002 and 2003 are still ongoing.
Yukos has said that it cannot pay the tax bill because its assets have been frozen by court order although it has offered to sell its shares in rival Sibneft - controlled by the Chelsea football club boss Roman Abramovich - to meet the bill. This offer has not yet been accepted and sources close to Yukos believed it would not be because the Kremlin was determined to seize control of the company rather than have it pay taxes. Russian president Vladimir Putin said two weeks ago that he did not want to bankrupt Yukos, sending its share price soaring 34%, but the raid at the weekend suggests otherwise. News of the next tax bill sent Yukos shares spiralling downwards by 11% and analysts believe the widening, fierce prosecution suggests the Kremlin cares little for Yukos’s future. Putin is generally believed to have ordered the onslaught against Yukos to rein in Mr Khodorkovsky, a key critic and political rival. Mr Khodorkovsky, the former chief executive and Russia’s richest man, is on trial for fraud and tax evasion.