Dudley Called to Give Tax Evidence

TNK-BP chief executive Robert Dudley has been summoned for questioning by the Interior Ministry over tax issues, as the head of British energy major BP on Thursday called in separate comments for the "consistent application of the rule of law" in the country.

"We confirm that Robert Dudley was summoned to the Central Federal District's division of the Russian Interior Ministry for a discussion of tax issues, including the activities of TNK in 2001-2003," TNK-BP said in a statement Thursday.

"We view this event as routine and unrelated to the current debate amongst shareholders," the statement said.

Dudley's involvement in the tax inquiries comes against the backdrop of worsening relations between BP and TNK-BP's Russian billionaire shareholders, and a potential takeover by a state-run energy company, such as Gazprom.

BP chief executive Tony Hayward made his comments at state-run Rosneft's shareholder meeting in Moscow on Thursday, where he met with CEO Sergei Bogdanchikov. (Related Story, Page 5.)

Hayward is to attend the St. Petersburg International Economic Forum over the weekend.

From 2001 to 2003, TNK was headed by Russian-born U.S. citizen Simon Kukes. Reports in the Russian media have suggested that Kukes is the unnamed oil company executive at the center of a 22.5 billion ruble ($950 million) tax case recently opened by the Interior Ministry.

Dudley had been due to face questioning this week, but both sides agreed to postpone the meeting, Interfax reported Thursday, citing a police source.

A spokeswoman for the investigative department at the Interior Ministry's Central Federal District, however, denied categorically on Thursday that they had summoned Dudley for questioning.

The TNK-BP CEO has also been summoned to the Moscow Prosecutor's Office for questioning in relation to a possible breach of employment law, the Financial Times reported Wednesday.

Hayward, speaking at Thursday's meeting of Rosneft, in which BP is a $1 billion shareholder, underlined the British company's determination to continue working in Russia but insisted that authorities must uphold investor rights. He did not mention TNK-BP directly.

"BP is committed to Russia," Hayward said. "Russia is a great nation in the process of economic transformation."

Hayward also said that if the country should ensure the "consistent application of the rule of law."

It was not immediately clear Thursday what questions Dudley would be asked about TNK, as he did not work for the Russian firm before its joint venture with BP in 2003.

The move to question him comes amid reports that Gazprom or Rosneft could take a majority stake in TNK-BP, after a clause stopping shareholders from selling their stakes expired at the beginning of the year.

It is the latest in a series of legal problems facing the embattled joint venture. In March, the Federal Security Service raided the company's Moscow office after an employee was accused of industrial espionage. Currently, nearly 150 TNK-BP foreign employees borrowed from BP have been banned from working for TNK-BP by a court decision, and barred from entering TNK-BP's offices.

Last week TNK-BP's major Russian shareholders, Mikhail Fridman's Alfa, Len Blavatnik's Access and Viktor Vekselberg's Renova, who together own half the company, called for Dudley's ouster, saying he was putting the interests of BP ahead of those of the Russian shareholders.

The demand came in response to Dudley's comment in an interview with Vedomosti last week that there had been a "breakdown" in management at the company, with disagreements ranging from staffing to expansion plans. BP has refused to fire Dudley.

BP's Moscow spokesman, Vladimir Buyanov, would not confirm reports Thursday that Hayward was meeting with TNK-BP's Russian shareholders and government officials. Buyanov said some private meetings were being held in Moscow and St. Petersburg.

Hayward will be among about 75 leading CEOs attending a closed-door meeting with president Dmitry Medvedev at the forum. The TNK-BP case is being seen as a litmus test for the safety of foreign investments under Medvedev's presidency.

Government officials have consistently portrayed the problems at TNK-BP as the result of a squabble between shareholders, in which the state should not meddle.

"This is the shareholders' internal affair. They must solve this issue within the company," Rosneft chairman and Deputy Prime Minister Igor Sechin said on the sidelines of the shareholders' meeting Thursday, Interfax reported.

Sechin discussed investor security with the European Union's External Relations Commissioner Benita Ferrero-Waldner at a meeting in Moscow on Wednesday.

In an interview last week, Prime Minister Vladimir Putin said he had foreseen the problems now besetting TNK-BP when he oversaw the deal establishing the firm in 2003, and recommended one side should have a controlling stake.