Yukos refused US insolvency refuge

Yukos, the Russian oil group, vowed yesterday to continue its battle for survival as a corporate entity, even though a judge ruled on Thursday that it could not file for bankruptcy protection in the United States.

The news, which removed one of the company's last hopes of resisting the Russian government, was followed by court testimony yesterday from the company's former chief executive, Mikhail Khodorkovsky. He told the court in Russia trying him for tax evasion, fraud and misappropriation that he was innocent.

"I do not consider myself guilty of a single charge that has been brought against me," Mr Khodorkovsky said. "I categorically object to the way that the running of a normal business has been presented as a work of criminal fiction."

Yukos filed for bankruptcy in a court in Houston in December in a last-ditch attempt to block the sale of Yugansk, after the Russian government seized the asset and auctioned it, claiming the move was to settle part of a disputed $27.5bn (£14.5bn) tax claim. Yukos and its supporters have argued the action was part of a politically motivated campaign against Mr Khodorkovsky, who was a critic of President Vladimir Putin's government.

Yukos had argued it qualified for bankruptcy protection in the US because it holds two bank accounts in Texas and its chief financial officer, Bruce Misamore, was based there. The argument was rejected by Judge Letitia Clark, who said there was no legal precedent for a foreign company that is such a large part of another country's economy to use US courts.

"The debtor is not a United States company, but a Russian company, and its assets are massive relative to the Russian economy, and, since they are primarily oil and gas in the ground, are literally part of Russian land," she said.

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