The legal battle over the future of Yukos, the troubled Russian oil giant, intensified yesterday as first Deutsche Bank filed to dismiss Yukos' claim of bankruptcy protection in the US and then the oil group itself threatened to sue the banks involved in the sale of its prized production unit.
Deutsche confirmed yesterday that it had filed a motion to have the US court's protection - gained last week in Houston - of Yukos removed. "Yukos owns no real or personal property and conducts no business operations" in the court's jurisdiction, Deutsche Bank said in the filing. Yukos' "blatant attempt to artificially manufacture a basis for jurisdiction constitutes cause to dismiss," Deutsche said.
Yukos has argued that it comes under US jurisdiction because its chief financial officer, Bruce Misamore, has a home in Houston, which also serves as Yukos' US address. The company also has a Texas bank account. The court in Houston will be holding a further hearing on 6 January.
The company's former chief executive and principal owner, Mikhail Khodorkovsky, has been in jail for 15 months in Moscow facing fraud charges. Yukos' chief executive, Steven Theede, has also fled Russia.
If successful, the German bank's move would let it advise Gazpromon a complicated set of deals through which the state-run Russian energy company plans to acquire Yuganskneftegaz (Yugansk), formerly the main production business of Yukos. The Russian government forced Yukos to sell Yugansk in an auction earlier this month in order to meet part of a $27.5bn (£14.4bn) claim for unpaid taxes.
Gazprom, with $10bn of funding from a consortium of Western banks led by Deutsche and ABN Amro, went to the auction of Yugansk on 19 December but did not bid, after Yukos had filed for bankruptcy protection in the US just days earlier. Yugansk was bought by a previously unheard of entity called Baikal. Subsequently Rosneft, another state-owned energy group, announced it would buy Baikal and then, last week, Gazprom said it would buy Rosneft.
Yukos said it would seek damages of more than $20bn from any parties involved in the sale of Yugansk for violating US bankruptcy law. It added: "Yukos will pursue all available legal avenues to recover damages from any person or entity that is involved in the illegal sale of these assets or any other assets covered in the company's bankruptcy filing."
Sources close to Yukos said that even though Gazprom and its lenders did not directly buy Yugansk, the banks could still be liable for damages if they were part of a deliberate auction strategy to see Yugansk end up with Gazprom. Also, if these banks now fund Gazprom's acquisition of Rosneft and Yugansk, Yukos will also pursue them for damages.
Maarten de Kok, a fund manager at Robeco in Rotterdam told Bloomberg: "It seems they [Western banks] are doing the dirty work for the Russian government, Rosneft and Gazprom. This is a new level of involvement for Western investment banks."
The four other Western banks behind the original Gazprom $10bn funding line are BNP Paribas, Calyon (part of Crédit Agricole), Dresdner Kleinwort Wasserstein and JP Morgan. While JP Morgan is based in the US, the others have extensive operations in that country and are required to comply with US bankruptcy law. The banks have insisted that they complied with the bankruptcy protection order issued by the court in Houston.Reuse content