Mystery bidder snaps up main Yukos oil business for £4.8bn

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The Independent Online

The main production unit and jewel in the crown of Yukos, the beleaguered Russian oil group, was bought by a mystery shell company yesterday for a fraction of its real value, in a Kremlin-orchestrated move that in effect kills off what was once the country's biggest oil producer.

The main production unit and jewel in the crown of Yukos, the beleaguered Russian oil group, was bought by a mystery shell company yesterday for a fraction of its real value, in a Kremlin-orchestrated move that in effect kills off what was once the country's biggest oil producer.

The sale will force Yukos to declare itself bankrupt in Russia within days and will inevitably see what little is left of the company sold or simply confiscated to pay its outstanding back taxes of more than $18bn (£9.3bn).

It heralds the beginning of what is certain to be a rancorous and lengthy legal battle as Yukos shareholders try to win compensation through the world's courts.

Yuganskneftegaz, a Siberian unit which produces more than 60 per cent of Yukos' oil, was bought in Moscow yesterday by a shadowy company called Baikal Finance Group in a forcible auction notable for its lack of transparency and competition.

The auction, which lasted less than five minutes, took place despite a last-minute ruling from an American court imposing a 10-day restraining order on the auction's declared bidders and financial backers, which included a heavyweight consortium of Western banks.

Gazprom, which is 39 per cent-owned by the Russian state, had been expected to buy Yuganskneftegaz and was the only other bidder who turned up at the auction.

But in the end Gazprom, which risked legal action by bidding, kept quiet and allowed the obscure Baikal Finance Group to buy Yuganskneftegaz for $9.37bn (£4.8bn) compared with a reserve price of $8.8bn. Baikal got a bargain. JP Morgan, the US bank, had estimated the value at up to $22bn.

The unknown company is widely regarded to be a front for some other interest, if not for the Russian government itself.

The two most likely suspects, Gazprom and Surgutneftegaz, denied they were linked to the mystery bidder but analysts remained sceptical, believing the company to be representing one or both of their interests.

It is also possible that Baikal will decline to pay within the stipulated 14-day period, handing victory to Gazprom, which will have benefited from 14 days' grace in which to raise the funds. Alternatively, if payment was not forthcoming the Russian state could simply step in and claim ownership.

Baikal was registered just a few days ago and does not even have an internet site.

Igor Yurgens, deputy head of the Russian Union of Industrialists and Entrepreneurs, decried the sale. "The outcome is scandalous because none of the people I know have ever heard a whisper of this Baikal Finance Group," he told Ekho Moskvy radio. "If a company such as Yuganskneftegaz has been bought under a false flag it just doesn't look good for us in Russia."

Yukos said the sale was illegal. "Whoever stands behind the winner and gave it financial help has done irreparable damage to their reputation and subjected their business to significant legal risks," Yukos' spokesman, Alexander Shadrin, said. "They have bought themselves a serious $9bn headache."

Mr Shadrin said that Yukos' lawyers, who had earlier in the day threatened to try to impound Russian oil exports abroad, would act and predicted that the ensuing litigation would drag on "for many years".

Yukos insists that the auction and the back tax claims are part of a Kremlin-inspired campaign to punish the company's main shareholder, Mikhail Khodorkovsky, for his political ambitions. Mr Khodorkovsky is on trial for fraud and embezzlement.

The Russian president, Vladimir Putin, has insisted, however, that the authorities are merely trying to enforce the rule of law and that Mr Khodorkovsky flouted it and should be punished.

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