Moscow Court Rules In PwC's Favour Over Yukos Audits

by Tatiana Smolenskaya, Tax-News.com, Moscow

29 October 2008

The Moscow federal arbitration court has fully overturned the rulings of the First Instance and Appellation Courts in the case relating to the audit of Yukos by PricewaterhouseCoopers.

According to a statement released by PwC, this case has now been terminated by the Moscow Region Federal Arbitrazh Court, and its ruling concludes the legal proceedings.

“We are very pleased with the court's decision. The court has made the correct ruling in this case, particularly given that one of the defendants, Yukos, no longer exists," PwC's statement said.

"This is good news for PwC, as well as for the Russian and international business communities. As always we continue to focus our energy on growing and developing our business in Russia," the statement added.

The company's legal fight began in 2006, when the Russian tax inspectorate accused it of helping Yukos to evade taxes during an audit of the firm in 2002. The authorities also accused the firm of audit irregularities between 2002 and 2004 because it had completed two reports on Yukos, one intended for the oil company's shareholders and the other for internal use - a claim that was upheld by the Moscow Commercial Court in March 2007, which imposed a substantial fine on PwC.

The company has always denied that it assisted Yukos in evading taxes, and has insisted that its audits were conducted above board.

Yukos, once Russia's largest privately-owned oil firm, was declared bankrupt in 2006 after being saddled with about USD30bn in debt. Much of this debt consisted of claims for back taxes after the firm was accused of tax evasion by the authorities over a number of years.

Recommended