Yukos investor threatens to sue Rosneft buyers

The majority shareholder in Yukos, the Russian oil company crippled by the Kremlin, has threatened legal action against Western investors who take part in the forthcoming London flotation of Rosneft.

A possible lawsuit from Group Menatep (GML) is one of a series of legal threats to confront investors considering buying shares in the $80bn (£44bn) initial public offering of Rosneft.

The main asset of the state-owned Rosneft is Yuganskneftegaz (Yugansk), which Yukos alleges was "stolen" from it.

Perversely, a GML spokesman said it wants the Rosneft offering to go well. "GML would be delighted if the Rosneft IPO is successful. It will give GML assets in London to go for," he said.

Rosneft's only assets in London will be the global depository receipts (GDRs) it plans to list on the London Stock Exchange, which will form the lion's share of the $10bn that the Kremlin hopes to raise from the issue. GML is already pursuing a $33bn damages claim against the Russian government through courts in The Hague.

Emmanuel Gaillard, of the law firm Sherman and Sterling, which is handling the lawsuit in The Hague, said: "There is a connection between this case and the Rosneft IPO in that the valuation [of Rosneft] is based largely on the value of Yugansk assets."

Yugansk accounts for 73 per cent of Rosneft's proven crude reserves and 70 per cent of current production. Before owning Yugansk, Rosneft was a relatively minor Russian oil producer.

GML owns about 60 per cent of Yukos, formerly Russia's leading energy company, which came under assault from the Kremlin over alleged massive unpaid taxes. Yugansk was forcibly taken from Yukos in an auction in December 2004 and ended up in the ownership of Rosneft.

Mikhail Khodorkovsky, the former chief executive of Yukos, used to own the biggest part of GML but has transferred his stake to other GML partners. He is serving eight years in Siberia after being convicted of tax offences in a politically charged case.

Robert Amsterdam, Mr Khodorkovsky's lawyer, said: "He is fighting for his life in a Russian concentration camp. There will be blood on the [Rosneft] prospectus. Whoever buys this will be investing in the Kremlin... I predict a field day for British lawyers."

Rosneft has stated it does not believe the lawsuits will result in any material financial hit, saying multiple cases related to the Yugansk deal have already failed.

In a newspaper interview published in Russia yesterday, Sergei Bogdanchikov, Rosneft's chief executive, said: "We believe that the whole issue of the Yuganskneftegaz purchase is closed."