Senior officials at the state-owned Russian oil giant Gazprom were accused yesterday of insider trading in shares of the rival oil producer Yukos in documents filed with a US court.
The claims threaten to embarrass the Russian government as the G8 summit of world leaders gets under way in Moscow and the Kremlin launches the controversial $80bn (£44bn) flotation of Rosneft, whose main production assets were allegedly stolen from Yukos.
The documents, filed with the Federal District Court of Columbia by lawyers representing US shareholders in Yukos, allege that a top Gazprom official short sold 650,000 shares in Yukos the day before it became public that the company had lost a tax appeal against the Russian government.
The 121-page document alleges that AS Khavin, the head of treasury at Gazprombank, was in possession of "material non-public information" when he executed the trade on the orders of senior Gazprom management in May 2004. Gazprom is also accused of shorting shares in two other Russian oil companies, Lukoil and RAO UES, on the same day, believing the adverse tax ruling against Yukos would also drive their share prices lower.
Details of the alleged insider dealing emerged on the same day Rosneft set the price of its public offer and conditional dealings began in the stock in London despite an attempt by Yukos to prevent the listing from going ahead.
A High Court judge, the Rt Hon Justice Charles, held a preliminary hearing yesterday into whether a judicial review can be held into the decision by the Financial Services Authority and London Stock Exchange to allow the Rosneft float to go ahead. The judge will hold a further hearing on Monday at which he will decide whether to grant Yukos permission to proceed with the review.
The Russian government is selling a 13 per cent stake in Rosneft. The shares have been priced very close to the top of the indicative range at $7.55, valuing the company at $79.8bn and raising $10.4bn. This makes it the sixth-largest IPO in the world.
BP, Britain's biggest company, is one of three strategic investors who have bought shares in the flotation. BP, headed by its chief executive Lord Browne of Madingley, has subscribed for about $1bn of stock. Petronas, the state-owned Malaysian oil producer, has bought a similar amount of shares and the China National Petroleum Company is understood to have been allocated about $500m of shares, having applied for $3bn.
The offer in London and Moscow was one a half times subscribed after a late rush of applications from Russian retail investors and a number of Russian oligarchs, including the owner of Chelsea Football Club, Roman Abramovich, who is understood to have subscribed for about $300m of shares.
About two-thirds of the shares on offer have been snapped up in London and the rest in Moscow. Institutional investors have emerged with 36 per cent of shares, of which 24 per cent have been bought by UK funds. The three oil companies will end up with about a quarter of the shares being sold off and the remaining 40 per cent will go to meet Russian demand.
However, the flotation could yet be halted if Yukos is allowed its judicial review and the court rules in its favour. If the judge gives permission for a review but decides there is insufficient time to hold it before trading officially begins in Rosneft shares on Wednesday, Yukos will ask for an injunction to delay the listing.
Yukos has promised a "lifetime of litigation" against Rosneft and any investors who buy into the company. The Rosneft prospectus contains details of compensation claims against the company totalling $48bn. Apart from the US action, an unnamed Spanish investor has launched a compensation claim against the Russian government claiming the expropriation of Yukos assets breached a bilateral investment treaty between the two counties. UK institutional shareholders are expected to launch a similar claim.