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. Last Updated: 07/27/2016

Wrench Thrown Into Yukos Share Sale Plans




Efforts by Russian oil major Yukos to sell newly issued shares in three subsidiaries to several offshore companies hit a snag this month as courts in six jurisdictions where the companies are based handed down injunctions forbidding the sales.


The news was reported by representatives of international investor Kenneth Dart, who challenged the share floats because they would dramatically dilute Dart's stakes in the subsidiaries - Samaraneftegaz, Yuganskneftegaz and Tomskneft.


The share floats offered to the companies were voted through at shareholder meetings from which Dart's representatives were effectively excluded.


Dart filed affidavits with the courts where the offshore companies are located - in Ireland, Cyprus, on the South Pacific island of Niue, in the British Virgin Islands, on the Isle of Man, and in the Marshall Islands - claiming that he stood to lose his assets unfairly if the sales were not stopped.


His representatives pronounced themselves satisfied with the injunctions. "I think this will effectively prevent these companies from subscribing to the shares issues," Dart spokeswoman Sharon Cornwell said.


But Yukos spokesman Maxim Puchkov said Thursday that the matter was far from settled.


"Dart wants to make it look like he has already won," Puchkov said. "He wants to put the [offshore] companies on the defensive. This seems to be wishful thinking."


Russia's Federal Securities Commission, or FSC, confirmed Thursday it had information the injunctions had been issued.


Yukos has denied allegations it controls the offshore companies in question. Puchkov said he could not speak for the offshore companies but he doubted they would take any steps unless Dart were to file a legal claim.


Dart, in turn, will file a legal claim if the offshore companies fail to contest the injunctions soon, Cornwell said.


Legal experts said it will probably take more evidence than Dart has so far provided to prove his case against the six offshore companies.


"Injunctions are a temporary remedy for the plaintiff, a means of keeping the status quo in place until a court hears the case by the plaintiff and the defendant in full," Eric Michailov of White & Case said.


To obtain an injunction does not demand "as high a burden of proof as in a normal hearing," he said.