Sun, Jul 25, 2004 - Page 11 News List

Kremlin offered a deal on Yukos by UK consortium

THE GUARDIAN , MOSCOW

A UK-based consortium of investors has offered an olive branch to the Kremlin over the slow dismemberment of Russia's largest oil company, Yukos, offering to pay off the company's tax debts in exchange for the controlling share now held by jailed oil tycoon Mikhail Khodorkovsky.

Only former Yukos shareholder Konstantin Kagalovsky, who now lives in Britain and is spearheading the effort, has been named publicly. Kagalovsky, an aide to former Russian president Boris Yeltsin, oversaw privatization of Yukos in the mid-1990s and was a senior executive in the company from 2000 to 2002.

The group's spokesman, Charles Stewart-Smith, said other members had chosen to remain anonymous and he would not even confirm all are based in Britain, although he referred to them as "financial investors" rather than as players in the oil market.

A letter was sent directly to Russian President Vladimir Putin on Thursday morning, Stewart-Smith said. The offer entails paying off the tax debts in return for the unfreezing of Yukos assets and their subsequent purchase.

Yukos, which is facing the seizure and sale of its core operating group to pay off a US$3.4 billion tax bill dating from 2000 as well as a US$3.3 billion bill from 2001 and others from subsequent years, has warned it will be bankrupt by the middle of next month if its accounts are not unfrozen and the seizure goes ahead.

Yukos' main shareholder, Khodorkovsky, and another investor, Platon Lebedev, are on trial in Moscow on charges of tax evasion and fraud dating back to company activities in the early 1990s. But the case against a company, which had become among the most transparent in Russia in recent years is widely seen as politically motivated.

Analysts warned on Friday that they had little hope of the Kremlin's accepting the offer.

This story has been viewed 4003 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top