(
ОАО НК ЮКОС) is a
Petroleum company in
Russia which, until recently, was controlled by Russian
Billionaire Mikhail Khodorkovsky and a number of prominent Russian
Businessmen . Khodorkovsky has been imprisoned and sent to Siberia, and others have fled Russia. Its headquarters are located in
Moscow .
Yukos was one of the world's largest non-state oil companies, producing 20% of Russian oil—about 2% of world production. Its assets were acquired in controversial circumstances from the Russian Government during the
Privatization process of the early
1990s . The initial period of "oligarchic privatization" was characterized by bloodshed, and Yukos was certainly no exception. Alexei Pichugin, the former Security Chief of Yukos, has been convicted on multiple counts of murder (
{Link without Title} ) and attempted murder, and is now under investigation along with Yukos partner Nevzlin for the shooting death of Vladimir Petukhov, the mayor of the Yugansk oil province and a vehement opponent of Yukos, on Mr. Khodorkovsky's birthday in 1998.
The company was created on + petroleum + organical synthesis).
Initially Yukos was created by the decree #354 of the Russian government comprised of the following enterprizes: a NPZ,
Kuybyshev NPZ and
Syzran NPZ (NPZ stands for NeftePererabatyvayushchy Zavod, literally "petroleum processing plant").
In 1995, by the decree #864 of the Russian government, Samaraneftegaz joined Yukos.
The main stockholders own the company via the
Offshore Holding Company Menatep .
In April 2003, Yukos agreed to a merger with
Sibneft , but the merger was soon undone in the aftermath of the arrest of Yukos CEO Khodorkovsky in October, 2003.
In July 2004, Yukos was charged with tax evasion, for an amount of over
US$ 7 billion. The Russian government accused the company of misusing
Tax Haven s inside Russia in the
1990s so as to reduce its tax burden; havens were set up by most major oil producers in outlying areas of Russia which had been granted special tax status to assist in their economic development; such "onshore-offshore" were used to evade profit taxes, resulting in Yukos having an effective tax rate of 11%, vs a statutory rate of 30% at the time. Yukos claims its actions were legal at the time. Yukos subsidiaries also declared the oil they produced to be "oil-containing liquids"
{Link without Title} to avoid paying full taxes. Moreover, only Yukos was charged with such tax evasion.
In a move to prevent bankruptcy, management made a friendly offer to the government to pay 8 billion dollars in a period of three years.
A is about $4 billion on 2003 revenues of $28.867 billion.
According to a resolution
{Link without Title} of the Council of Europe,
''"Intimidating action by different law-enforcement agencies against Yukos and its business partners and other institutions linked to Mr Khodorkovsky and his associates and the careful preparation of this action in terms of public relations, taken together, give a picture of a co-ordinated attack by the state."
This ''"raises serious issues pertaining to the principle of nullum crimen, nulla poena sine lege laid down in Article 7 of the ECHR and also to the right to the protection of property laid down in Article 1 of the Additional Protocol to the ECHR."
''"The circumstances of the sale by auction of Yuganskneftegaz to “Baikal Finance Group” and the swift takeover of the latter by state-owned Rosneft raises additional issues related to the protection of property (ECHR, Additional Protocol, Article 1). This concerns both the circumstances of the auction itself, resulting in a price far below the fair market-value, and the way Yukos was forced to sell off its principal asset, by way of trumped-up tax reassessments leading to a total tax burden far exceeding that of Yukos’s competitors, and for 2002 even exceeding Yukos’ total revenue for that year."
On 15th December, based on a bank deposit of $4M and its American CEO's Houston home, Yukos filed for
Bankruptcy Protection in the United States, estimating its assets at $12.3 billion and its debts at $30.8 billion, including "alleged taxes owed to the Russian government". It accused the Russian authorities of "an unprecedented campaign of illegal, discriminatory, and disproportionate tax claims escalating into raids and confiscations, culminating in intimidation and arrests". After several weeks of deliberation, the Houston court declared that under no conceivable theory could Yukos assert domicile in the US.
The high-profile arrest of Khodorkovsky is widely believed to have been due to his activism in the
Russian Political Process . Yukos/Menatep was widely believed to have bought a substantial fraction of Duma deputies, with which they were seeking to block any tax legislation not favorable to the oil companies. On
October 31 ,
2003 , shortly after the arrest of the company's CEO, the Russian government froze ownership of 44% of the company's shares. The reason given was to prevent a group of shareholders led by Khodorkovsky from selling a large stake of the company to the US oil firm Exxon.
A Yukos shareholders' meeting scheduled for
December 20 ,
2004 was to discuss a "crisis plan." A Russian company must hold such a meeting before it can apply for bankruptcy in Russia. The Russian Government sold Yukos' main production unit, ''Yuganskneftegas'', at auction on
December 19 ,
2004 to recover some of $28 billion in alleged tax debts, following the loss of an appeal by the firm.
Menatep , the company representing Mikhail Khodorkovsky, promised to challenge the sale's legality in a number of countries, and to sue the buyer and any company helping to fund the deal. The expected buyer was the 38% Russian state owned company OAO
Gazprom . Some European and American oil firms decided not to bid.
On
December 19 ,
2004 , the
Baikalfinansgrup won the auction for YUKOS's
Subsidiary Yuganskneftegas with a 260.75 billion
Rubles ($9.4 billion) bid. Yuganskneftegas was a few months earlier valued at between $15 billion and $17 billion by
DrKW which the
Russian Government hired to value the subsidiary.
Suggested
Financiers to the Baikal Finance Group are Gazprom,
Sberbank , the
Russian Central Bank ,
China National Petroleum Corporation , and
ONGC (India). The reason for this arrangement may be that
Gazprom fears international legal action against it after a
Houston, Texas court ruling that barred Gazprom from bidding for the unit. This ruling was subsequently vacated.
According to people familiar with the and
Gazprom 's oil unit
Gazpromneft . Accounts from the auction say that the first bid of $8.6 billion came from Baikal. When the auctioneer asked Gazpromneft to offer its price, a representative of the company asked to make a telephone call and left the room. A few minutes earlier, the auctioneer had told participants that using a mobile phone or leaving the room was against the rules. When a Gazpromneft representative returned to the room, Baikal made a bid of $9.3 billion. Gazpromneft never placed a bid or spoke out.
In the course of these events the value of Yukos shares plunged, and investors lost most of their investment.
By mid-December, 2004, all members of the board of Yukos, and most of the company's senior managers, had left Russia, some of them because of "fear of arrest" after being "summoned for questioning by prosecutors" (
{Link without Title} ). According to a December, 2004,
Houston, Texas court filing the CFO resides in Houston. According to a company spokeswoman the CEO resides in
London, UK as of December, 2004.
According to the Moscow Times of Friday,
February 4 ,
2005 , Issue 3099, Page 5, Mikhail Brudno and Vladimir Dubov fled to
Israel in 2003, and were seen on
February 2 ,
2005 in Washington, D.C. at an official function of
George W. Bush .
{Link without Title} Both men are cited in an international arrest warrant regarding their involvement in the Yukos tax case. Leonid Nevzlin, also in Israel, is sought on several counts of murder and attempted murder.
In a more recent development, on Wednesday 6 April 2006, Mr. Aleksanyan was arrested just six days into his new role for the Company as Executive Vice President. Yukos comments on its web site: "We can only assume that this action against him is a direct result of his accepting a position to work to protect YUKOS Oil Company and its legitimate stakeholders".
