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. Last Updated: 07/27/2016

Yukos Sale Challenge Imminent

The prosecutor general's office is preparing to file lawsuits seeking the reversal of last year's loans-for-shares privatization auctions, press reports said Friday.

According to the daily Segodnya, the prosecutor general's office will file a motion with an arbitration court within the next few days asking that the auction for the Yukos oil company last December be declared void.

The prosecutor's office also is preparing to take court action in relation to 11 other deals struck under the controversial privatization scheme, the newspaper and Interfax reported.

A Bank Menatep-led group won an auction and a separate investment tender that gave it control of 78 percent of Yukos, Russia's second-largest oil company, in return for a loan of $309 million.

The investors would retain the shares unless the government repaid the loan by September, which is not planned or budgeted.

Interfax quoted a source at the State Property Committee, which oversaw the auctions, as saying that the chances of a successful lawsuit were "minimal" and that government representatives could not be held legally responsible for the outcome of the auctions.

The legal arguments reportedly cited by the prosecutor's office -- that the State Property Committee called the auctions without the necessary government backing and without registering the auction with the Justice Ministry -- are akin to those put forward by Norilsk Nickel in a case against Uneximbank, the State Property Committee and other government agencies last month.

In that case, the Moscow Arbitration Court rejected Norilsk's claim and maintained that the auctions were carried out in a legal fashion.

According to sources in the State Property Committee quoted by Segodnya, the state accounting chamber will shortly publish a critical report about the activities of the committee.