A Russian court on Tuesday turned down two crucial appeals by the country's largest oil producer, Yukos. One was an attempt to stop the government from collecting a US$3.4 billion tax bill and the other a request to let Yukos sell shares in a rival company to help pay the claim.
In its first ruling, the court, the Moscow City Court of Arbitration, rejected a request to suspend collection of the 2000 tax debt -- at least until appeals against the seizure of the company's core subsidiaries had been heard, according to the Interfax news agency.
The court then threw out a request that Yukos be allowed to pay part of its tax bill using shares of Sibneft. Yukos tried and failed to merge with Sibneft. Sibneft called off the deal after the Yukos chief executive, Mikhail Khodorkovsky, was arrested in October. Yukos still owns 20 percent of Sibneft.
Yukos is thought to be among the targets of a Kremlin-inspired campaign to wrest power from Russia's oligarchs.
The company's founder and controlling shareholder, Khodorkovsky, is on trial for tax evasion and fraud charges.
His trial resumes today, and prosecutors said on Tuesday that they would begin introducing witnesses.
In the last few weeks, Yukos executives have frequently warned that with corporate bank accounts frozen and a stop order in place on selling assets, bankruptcy and production cuts could be just around the corner.
The authorities, meanwhile, have been looking at Yukos' tax records for years other than 2000, and analysts say the company's tax bill could balloon to US$10 billion.
Yukos supplies a fifth of all of Russia's oil, but concerns about it being cut off from the world market eased somewhat on Tuesday, after Russia's government-owned railroad said that it would export Yukos oil even if the company could not pay the freight itself.
The media office of Russian Railways told Interfax that even if Yukos was unable to pay for rail freight, the agency could bill the traders who sell the oil.
The standoff against Yukos and the Kremlin remains tense.
If Yukos does file for bankruptcy, its core shareholders, including Group Menatep, Khodorkovsky's investment holding company, would be at the front of the creditors' line.
According to one estimate, Group Menatep at the end of the second quarter held about US$10 billion of the liabilities of the parent company, NK Yukos, up from US$7 billion at the end of the first quarter.
The United Financial Group, a brokerage firm partly owned by Deutsche Bank, said in a note to clients that creditors other than Menatep were owed relatively little.
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