The Moscow Arbitration Court yesterday upheld a freeze order on the Yukos oil company's assets, effectively putting the company's assets up for collateral to ensure payment of the government's back tax claim of 99.4 billion rubles (US$3.4 billion).
Yukos had said it could satisfy the back tax claim only if the court order preventing it from selling assets were lifted and if it were allowed to stagger the payments.
The Arbitration Court ruling came a day after court bailiffs handed the company an execution order on the Tax Service's claim and bank accounts of NK Yukos, a holding vehicle for the company's production assets, were frozen. Those moves prompted a warning from the company that it may have to stop oil production in the near future.
"The actions of the Court Bailiffs Service to arrest the bank accounts create an indisputable threat of halting current operations of Yukos," posing "a threat to the company's ability to pay current taxes and meet its obligations to creditors," the company said in a statement issued late Thursday.
Earlier Thursday, Yukos had offered court bailiffs its 35 percent stake in the Sibneft oil company as payment for the 2000 tax claim. Yukos obtained the Sibneft shares in a failed merger that has yet to be formally unwound.
"The refusal to take Sibneft shares and arrest of its [Yukos'] bank accounts will have a negative effect on the operations of the company, and its ability to continue as a going concern," Yukos said.
It added that the value of its stake in Sibneft "exceeds the total of taxes, surcharges and penalties levied on Yukos Oil Company by the ruling of the Court of Arbitration."
Hours after the bailiffs delivered the court papers on Thursday, Russian news agencies reported that the Tax Service was demanding almost the same amount -- 98 billion rubles -- for 2001.
The company's shares plunged 15 percent in a frenzied response to the reports. Yukos had said the 2000 back taxes bill alone could force it into bankruptcy.
A Yukos spokesman said that the bank accounts that were frozen did not include those of Yukos' operating subsidiaries.
"The company's primary cash flows don't go through these accounts," Dow Jones NewsWires quoted a company spokesman as saying.
Yukos says it hadn't received any official notification of the new claim for 2001, which drives up government demands against Yukos to a crippling US$6.7 billion.
The oil giant could also face new claims for 2002 and last year, which analyst Pavel Kushnir of the United Financial Group in Moscow called "almost certain" now.
The ruin of Yukos, Russia's biggest oil producer with output at about 1.72 million barrels a day, could tarnish Russia's image abroad and slow growth in the oil sector -- the country's main cash earner and an industry that bolsters President Vladimir Putin's international clout.
The multi-pronged attack on Yukos is widely seen as a Kremlin-directed move to punish former Yukos chief executive officer Mikhail Khodorkovsky, Russia's richest man, for his funding of opposition parties and to warn other billionaire businessmen to stay out of politics. Government officials insist, however, that the probe is part of a drive to root out corruption and ensure that businesses and their leaders obey the law.
Putin said last month that Yukos' bankruptcy was not in the government's interest. But some analysts believe that Yukos' only chance for survival is if control over its assets passes from the hands of the politically ambitious Khodorkovsky and his associates into more Kremlin-friendly hands.
Yukos says it can satisfy the 2000 claim if a court order preventing it from selling assets is lifted and if it is allowed to stagger the payments. The government has not responded to any of Yukos' overtures.
With the report of a new claim, bankruptcy is looking increasingly likely, Kushnir said. The Sibneft stake is valued only at about US$4 billion, far short of the US$6.7 billion Yukos might need. Yukos' market value has fallen US$20 billion since the start of the legal probe.
SCHEDULE: The delegation is due to meet with President Tsai Ing-wen this morning and witness the signing of an MOU on bilateral health cooperation in the afternoon US Secretary of Health and Human Services (HHS) Alex Azar yesterday arrived in Taipei aboard a US government plane at the head of a delegation that is the highest-level visit by a US official since Washington switched diplomatic recognition to China in 1979. Azar’s flight landed at Taipei International Airport (Songshan airport) at 4:48pm, nearly one hour earlier than scheduled, the Ministry of Foreign Affairs said. The apron where it landed is reserved for military aircraft, the Songshan Air Force Base Command said. The members of Azar’s delegation included HHS Assistant Secretary for Preparedness and Response Robert Kadlec, HHS Chief of Staff Brian
CHINESE FIGHTERS: Beijing marked the US Cabinet member’s visit by briefly sending two warplanes across the median line of the Taiwan Strait yesterday morning President Tsai Ing-wen (蔡英文) yesterday met with US Secretary of Health and Human Services Alex Azar in the highest-level official meeting between the two nations since 1979. “It is a true honor to be here to convey a message of strong support and friendship from [US] President [Donald] Trump to Taiwan,” Azar said during the open portion of his courtesy call to the Presidential Office, which was streamed live online before Tsai and Azar held a closed-door meeting. “Taiwan’s response to COVID-19 has been among the most successful in the world, and that is a tribute to the open, transparent,
ALEX AZAR: The first visit by a head of the Department of Health and Human Services would strictly observe the CECC’s special regulations, the Ministry of Foreign Affairs said US Secretary of Health and Human Services (HHS) Alex Azar is to lead a delegation to Taiwan — the highest-level visit by a US Cabinet official since the two sides cut formal relations in 1979. The plan was announced yesterday morning by the US Department of Health and Human Services and confirmed by the Ministry of Foreign Affairs (MOFA). Beijing has expressed its concerns to Washington, Chinese Ministry of Foreign Affairs spokesman Wang Wenbin (汪文斌) said later yesterday. Taiwan and the US only issued statements saying that the visit would happen “in the coming days.” MOFA said that due to security concerns, it would
‘CROSS-STRAIT CONSIDERATIONS’: Groups said that the Ministry of Education’s policies excluded Chinese and students should not be blocked over political issues The Taiwan International Student Movement yesterday said it would protest today outside the Ministry of Education in Taipei against a policy that excludes some Chinese students from returning to Taiwan amid the COVID-19 pandemic. Since June 17, the ministry has allowed foreign students from 19 “low risk” and “medium-low risk” countries and regions to enter Taiwan. On July 22, it announced that it was relaxing restrictions to include students from all countries and regions who are graduating this semester and on Wednesday it further expanded entry to students enrolled in degree programs. A letter sent by the ministry on Wednesday to universities did