23 April 2004 01:56
Russian tax officials raid Yukos offices ENERGY:
Russian authorities yesterday stepped up pressure on Yukos, the embattled
Russian oil company, and its core jailed shareholders as tax officials raided
the group's headquarters in search of tax evasion evidence.
The raid increased fears that the government could bankrupt Yukos in order to
confiscate the assets of Mikhail Khodorkovsky, the group's former chief
executive and its main shareholder.
Mr Khodorkovsky, Russia's richest man, has been in detention since his
arrest last October on charges of tax evasion and fraud.
This week Standard & Poor's, the rating agency, downgraded Yukos by
five notches to a near default level citing concerns that the company could
lose control over its cash-generating subsidiaries and be pushed into
insolvency by the state.
Some analysts said the raid could also be designed to put pressure on Mr
Khodorkovsky ahead of his trial expected in June, so that he gives up control
of the company "voluntarily".
Mr Khodorkovsky and other shareholders, including Platon Lebedev, also in
jail, own about 46 per cent of Yukos through Menatep, a holding company.
Yukos said tax officials spent about five hours searching its offices for
documents related to 1998 and 1999 tax payments in two of its subsidiaries.
Yukos also faces a Dollars 3.5bn tax claim for alleged tax evasion in 2000.
This month a Russian court issued a ruling banning Yukos from selling or
transferring any of its assets to secure a tax payment. This triggered the
ratings downgrade.
Anders Aslund, of Carnegie Endowment, said there was a 70 per cent chance
that the government would bankrupt the company.
"Their (government's) first objective is to confiscate Menatep
shares in Yukos and bankruptcy is simply a technical solution."
A bankruptcy of Yukos would create enormous damage for the Russian stock
market, analysts said. "The impact could be similar to the 1998
financial crash. It would be the last nail in the coffin of foreign
investments in Russia," one said.
While many Russian investors sold Yukos stock following Mr
Khodorkovsky's arrest, foreign investors have been willing to hold on in
a belief that the attack by the authorities was focused on core shareholders
rather than the company. Capital Group, the US mutual fund, is said to have a
significant stake.
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