Yukos to be sold despite US ruling

Russia's Federal Property Fund is saying it will proceed with an auction of oil major Yukos' main unit despite a US court decision to freeze the state-imposed sale.

    Yukos former head Mikhail Khodorkovsky is behind bars

    "We are selling Yugansk by order of a bailiff and so far we have not received any order to cancel the auction. Therefore, we are still planning to continue," a spokesman said.

    Under the court decision, the auction - imposed to pay off Yukos' giant tax debts - should be held off for 10 days. It was not clear if a US court had any jurisdiction over the case.

    On Thursday, a US bankruptcy judge put a temporary hold on Sunday's auction of the core production unit of the Russian oil giant, a news report said.

    But the Itar-Tass news agency said her ruling had no legal force in Russia, and analysts likewise predicted the US proceedings would have no impact on the sale of Yuganskneftegaz.

    No basis

    In a desperate, last-minute attempt to stop the sale, Yukos had turned to the US bankruptcy court in Houston, Texas, where Judge Letitia Clark based her ruling on testimony from Yukos' chief financial officer that American investors would be hurt, The New York Times reported.

    Yukos and its subsidiaries have
    been under Russian scrutiny

    Yukos made the bankruptcy filing in Houston on Wednesday, seeking protection from its creditors - the Russian government, which is seeking back taxes - and reorganisation into a profitable enterprise.

     

    Clark held a hearing on the case on Thursday, during which she heard testimony from Bruce Misamore, Yukos' top financial officer and an American citizen, who wrote in the bankruptcy filing: "Our management board concluded that there is absolutely no chance of our obtaining justice in the Russian court system."

    But lawyers for Deutsche Bank, one of the financial institutions planning to offer financing for the sale, said there was no basis for the court case in the United States because all of Yukos' operations were in Russia.

    Yukos is scheduled to essentially end at Sunday's auction. Its founder sits in jail, and the Russian government is seeking more than $27 billion from the company in taxes.

    To help pay the bill, the auction of Yuganskneftegaz, a series of oil fields and Yukos' largest production subsidiary, was set.

    The Kremlin set the opening bid of $8.65 billion, a low figure.

    The state-run Gazprom natural-gas firm was expected to file the winning bid.

    SOURCE: Agencies


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