Russia legal onslaught targets YUKOS assets-papers

October 6, 2005
Reuters

MOSCOW, Oct 6 (Reuters) - Russian media said on Thursday that fresh raids at the Amsterdam and Moscow offices of crippled oil firm YUKOS were a further step in seizing its remaining assets and isolating its imprisoned founder.

Four offices in Russia with links to the oil firm were raided in connection with an alleged money laundering scheme to spirit $7 billion out of the country in 2000-2003. The firm's Netherlands-based YUKOS Finance B.V. subsidiary was also raided in Amsterdam.

Prosecutors have said they were about to file new charges against former YUKOS CEO Mikhail Khodorkovsky, who is serving an eight-year sentence for fraud and tax evasion. Khodorkovsky's lawyer said prosecutors launched the searches to keep their politically ambitious client as long as possible under their control in a Moscow pre-trial centre rather than move him to a penitentiary with a milder regime outside Moscow.

"We are in no doubt that the authorities will use any pretext to keep him where he is and to maintain full control over him," Yevgeny Baru told Ekho Moskvy radio. Khodorkovsky can be held in pre-trial custody in Moscow, where he can be strictly monitored, if he is subject to a new investigation. Authorities appear to be concerned that he may somehow be able to conduct business from his cell if he is moved to a prison with a less strict regime away from the capital.

Khodorkovsky, who says he is the victim of Kremlin intrigue, has held a week-long hunger strike and launched a botched attempt to run for parliament after being sentenced on May 31.
"The aim of the authorities is to break down a defiant Khodorkovsky," former economy minister Yevgeny Yasin told Kommersant daily. "If he had kneeled repentant in front of the authorities nothing would have happened.

However, most other newspapers said that YUKOS's new problems were most likely motivated by business interests. "The new searches and the fact Khodorkovsky has not been sent to a proper prison yet are connected," Vedomosti business daily quoted a source close to prosecutor's office as saying.

"But the new charges, which (Khodorkovsky) can face soon, are ... mainly an attempt to get hold of YUKOS shareholders' money abroad," the source said. Russia has crushed YUKOS with $27 billion of back tax claims in a legal assault Khodorkovsky says was politically motivated.
In December, bailiffs forcibly sold off YUKOS' main production unit, Yuganskneftegaz, and state oil firm Rosneft ended up buying it for $9.4 billion, significantly less than estimates made at the time by investment bankers of its value.

YUKOS' Western creditor banks owed some $475 million and YUKOS' main shareholder, Menatep Group, have been chasing YUKOS Finance B.V. through the Dutch courts in a bid to recover their debts. Igor Yurgens, first vice-president of Russian investment bank Rennaisance Capital, told Kommersant that the new legal onslaught against YUKOS could be an attempt by its rivals to seize what was left of the company.

"They want to get the whole of YUKOS," he said.

The original article appears here.

- MDT

Labels: money laundering