18 June 2004 00:00
Yukos soars as Putin offers assurance over bankruptcy
ByLine: Andrew Jack in Moscow
Vladimir Putin, the Russian president, on Thursday offered assurances that he did not want to see the bankruptcy of
Yukos, the embattled oil group, in remarks that pushed up the company's shares by up to 34 per cent.
In a rare comment on the criminal and commercial feuds coming to a head around Yukos, Mr Putin said in response to a
journalist's question: "The Russian authorities, the government and economic officials are not interested in
the bankruptcy of such a company as Yukos. The government will do its best to prevent the collapse of the
company."
His remarks raised the stakes sharply in the dispute, ahead of an appeal in a Moscow court on Friday of a $3.4bn
extra tax charge for 2000 brought by the authorities, which comes on top of an asset-freezing order preventing the
company from raising money to pay the bill.
Yukos executives last week warned that the hearing could trigger the company's swift bankruptcy, in comments
that drove down its share price sharply and temporarily triggered a drop in the RTS Moscow index that wiped out all the
gains of the past six months.
In his comments on Thursday while attending a summit in Tashkent, the capital of Uzbekistan, Mr Putin stressed that
the cases should be decided in the courts, but the comments by the Russian head of state, in a dispute which is widely
seen as politically motivated, will send an important message to those involved in the case.
He spoke after the opening day of the trial on $1bn of fraud and tax evasion charges against Mikhail Khodorkovsky,
the former chief executive and largest shareholder in Yukos, and his business partner Platon Lebedev.
Some analysts have accused Yukos' management of brinkmanship in exaggerating the threat of bankruptcy as part of
a defensive strategy. However, a growing number of market participants and creditor banks have become increasingly
nervous about the uncertain future for the company with little sign that the government is willing to compromise.
Yukos on Thursday made public a series of proposals that it said had been sent to the Russian government without
response, which were designed to allow the payment of its tax debts and its continued survival. These included plans to
sell assets and change the balance of power among shareholders in the company.
A spokesman for Menatep, the holding company through which Mr Khodorkovsky and his partners hold their stakes,
indicated that they could be willing to support such a scheme and contribute to help pay off the taxes.
Mr Putin's comments pushed up Yukos' shares so far that they were automatically suspended on the RTS and
the Micex, the two main Russian stock exchanges, where they will only begin trading again from Friday morning.
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