Yukos warning: Even BP is under threat

Click to follow
The Independent Online

Yukos, the Russian oil giant under attack from the country's authorities, has warned that all major companies in Russia could meet a similar fate.

Yukos, the Russian oil giant under attack from the country's authorities, has warned that all major companies in Russia could meet a similar fate.

In a briefing for journalists in London yesterday, the company defended itself against accusations from Russia's ministry of taxes that it used a network of 17 front companies to evade taxes. The ministry has claimed that Yukos owes 99.4bn roubles (£1.9bn) for 2000 alone in back tax and penalties.

Yukos will hold a full board meeting in London tomorrow to consider the tax demand, which was made in the past few days. The move led on Monday to lending banks warning the company that "a potential event of default has occurred".

Bruce Misamore, the chief financial officer at Yukos, and Dmitry Gololobov, its vice-president of corporate law, told reporters the company had broken no laws.

They said the "tax management techniques" used by Yukos in 2000 and subsequent years were common practice and legal. Mr Gololobov told The Independent after the event that the Russian government was seeking to establish a precedent with Yukos in punishing the use of this tax minimisation strategy.

He added: "This will be used as an instrument to attack any company, whenever they want. It will be a universal instrument of attack."

The tax demand relates to the tax breaks enjoyed by 17 Russian companies for operating in disadvantaged regions of the country. Yukos sold oil to these companies, which paid much lower tax than Yukos itself.

The Russian government contends that the 17 companies and Yukos were actually one and the same.

BP, which forged a multi-billion pound Russian joint venture with local player TNK last year, quickly moved to distance itself from the possibility of a similar tax threat.

Lord Browne of Madingley, BP's chief executive, revealed that its Russian partners had taken on full liability for any historic tax demands. He said the owners of TNK, led by "oligarch" Mikhail Friedman, had by contract taken the liability on themselves.

Lord Browne said: "Past taxes are entirely with our Russian partner in the contract. It is their problem.... We have a clean start as far as taxes are concerned."

Comments