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Thu, Nov 11, 2004 - Page 12 News List

Yukos chairman says selling shares could resolve conflict

AFP , MOSCOW

The chairman of beleaguered Russian oil giant Yukos said in an interview published on Tuesday that the owners of the company could seek to resolve their conflict with the Kremlin by selling their stakes.

"The problem can be resolved if the Menatep Group, as the owner of Yukos, sells its stake in the oil company," Viktor Gerashchenko told the Izvestia daily.

Menatep is the vehicle through which tycoon Mikhail Khodorkovsky and his associates own 61 percent of Russia's largest oil producer.

Khodorkovsky has offered in the past to cede his shares in return for an end to the state's campaign against Yukos. His lawyer said the proposal was still valid although there were no current negotiations on the issue with the government.

"He is ready to surrender his shares to save the Yukos oil company," said Anton Drel in comments broadcast by the NTV channel.

The company warned it may file for bankruptcy after the government earlier this month slapped fresh tax claims against it, taking the total potential liability to US$17 billion, more than twice its market capitalization.

Khodorkovsky, the founder and former chief executive of Yukos, who is on trial for fraud and tax evasion facing more than 20 years in jail if convicted, is widely seen as the target of a campaign to neutralize his political ambitions.

Russian authorities have said they would sell Yukos' crown jewel Yugansneftegaz in order to settle the firm's tax bill at a price well under that at which it has been valued.

This has sparked speculation that the intention is to hand over the lion's share of the country's top oil corporation to state-controlled gas behemoth Gazprom to create a new national oil and gas giant.

"The prospects of a wholesale board change and further state involvement indicate an agreed resolution could be forthcoming rather than the doomsday bankruptcy scenario," Paul Collison of UBS Brunswick investment bank in Moscow said.

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