Yukos Facing New Humiliation As Rosneft Sues For Back Tax Money

by Tatiana Smolenskaya, for LawAndTax-News.com, Moscow

17 March 2005

Ailing Russian oil firm, Yukos has been dealt another body blow.

It emerged this week that state-controlled Rosneft, which wrested control of the Yuganskneftegaz production unit from Yukos late last year, is suing the latter firm for the tax liability accrued by the key unit.

Speaking on behalf of Yukos this week, spokesman Alexander Shadrin expressed outrage at the legal action brought by Rosneft, observing that:

"To steal our asset and then file a false and unfounded multi-billion dollar lawsuit against our company of acting unlawfully in the operation of that asset is ludicrous."

In addition to calling for Yukos to pay Yugansk's tax liability, Rosneft has charged Yukos with underpaying for oil from the unit.

Yugansk was initially acquired at the auction organised by the Russian authorities last year by Baikal Finance, which was then acquired by Rosneft. Rosneft, in turn, has revealed that it plans to merge with state-owned Gazprom, effectively renationalising the key product unit.

However, according to reports in the international media, Rosneft itself is in financial trouble, and representatives are due to meet with international bankers today.

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