Menatep To Sue Rosneft For Another $650m

by Tatania Smolenskaya, Tax-News.com, Moscow

02 May 2005

The legal turmoil following Russia's attack on Yukos deepened last week when Menatep said it would sue production unit Yuganskneftegaz for the repayment of US$650m in overdue loans.

Gibraltar-based Group Menatep Ltd was the holding company through which Mikhail Khodorkovsky controlled Yukos. Yuganskneftegaz was forcibly sold to a mystery finance company based in a provincial Russian coffee-shop which was shortly afterwards acquired by state-owned oil company Rosneft. It had been planned that Rosneft would merge with Gazprom, but perhaps because of the legal clouds hanging over Rosneft, the marriage is now in doubt.

Menatep Chairman Tim Osborne said the company would file suit in the London Court of Arbitration this week.

Yuganskneftegaz itself is suing Yukos for damages arising from billions of dollars in tax claims against it, which Rosneft says are Yukos's affair. Yukos says that the claim is based on ignorance of accounting standards.

Although the new claim will further embarrass the Russian government, it is dwarfed by the claim already filed by Menatep and other Yukos shareholders against the Russian government which totals US$33.1 bn. That suit is based on Russia's (unratified) signature of the European Energy Charter. The plaintiffs claim that the Russian state is responsible for the devaluation of Yukos’s shares and for failing to protect investments in Russia.

While the lawyers sing and dance their way to the bank, Mikhail Khodorkovsky, still behind bars in Moscow along with colleage Platon Lebedev, must wait another few weeks to learn his fate. The Meshchansky district court postponed its verdict last Wednesday, perhaps in anticipation of celebrations planned by President Vladimir Putin when he hosts world leaders on Victory Day, May 9th. The announcement of the delay was posted with no advance warning to the defendants, their lawyers, or hundreds of press waiting in the street outside.

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