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. Last Updated: 07/27/2016

No Yukos Out-of-Court Settlement

Prosecutors said Wednesday that there was no chance that jailed oil baron Mikhail Khodorkovsky could settle his case out of his court, signaling their determination to bring him to trial.

"There is no question of an out-of-court settlement," Prosecutor General's Office spokeswoman Natalya Vishnyakova told foreign journalists Wednesday.

Even though the prosecutors' investigation into Khodorkovsky is now completed, she said she could not rule out the possibility that other arrests could be made in connection with a larger investigation into Yukos, which, she said, "is proceeding at full steam."

"There is a lot of interesting stuff here," she said, pointing a large white folder marked "NK Yukos." She refused to elaborate.

Her comments came a day after prosecutors announced that they had completed their investigation into the former Yukos chief executive, who was arrested at gunpoint Oct. 25 and charged with massive fraud and tax evasion. A court has approved Khodorkovsky's detention until Dec. 30, though prosecutors can request an extension.

The comments came as the Organization for Economic Cooperation and Development issued a stern warning that the Yukos affair was on track to batter investor confidence and economic growth. Analysts say the attack on Khodorkovsky and other core shareholders in Yukos is a politically motivated onslaught prompted by the businessman's moves that threaten President Vladimir Putin's power base.

Vishnyakova said the trial won't start "until the moment Khodorkovsky says, 'I've read it all.'"

Khodorkovsky's lawyers have been presented with a 33-page indictment and 227 volumes of evidence substantiating the seven counts against him. Each volume is 300 to 500 pages.

Prosecutors will not demand a closed trial, Vishnyakova said, adding, though, that it was up to the court to decide.

She said she was unable to confirm or deny speculation that Yukos could be hit with up to $10 billion worth of tax fraud charges. The market slumped on rumors last week that the Tax Ministry would announce Yukos had evaded $10 billion in taxes, a move that could have led to its bankruptcy. But those rumors were quashed after the Tax Ministry canceled a news conference it had scheduled to hold on oil payments.

"I can only guess that they followed the path of some Yukos money, made some calculations, grabbed their heads ... and said something," Vishnyakova said of the Tax Ministry.

She said she had asked the senior investigator on the Yukos case, Salavat Karimov, about the rumors. She said that he had answered "yes," but refused to clarify what he meant by that. Vishnyakova said she was now making an effort not to spook the market by making unguarded statements. "After all of those market dives, I've become very careful. I did not expect that my previous statements [regarding the case] would lead to such market dives," she said.

But the OECD predicted more doom and gloom over the Yukos affair in its semiannual report published Wednesday. It said economic growth could slow down next year because the arrest of Khodorkovsky and the subsequent arrest of the large Yukos stake had sparked investor fears about property rights. It estimated growth could slow to 5 percent in 2004, compared to an expected 6.3 percent this year.

In the strongest criticism yet of the Yukos affair by an international financial institute, the OECD lashed out at "the deployment of the prosecutors, police and security services in a legal and political campaign directed against top executives of Yukos" that "has renewed concerns about the security of property rights and threatens to have a lasting impact on business confidence."

"There are already signs that the attack on Yukos is having a negative impact on fixed investment, especially in the oil sector," the report said. Economists have said the oil sector has been one of the main drivers of Russia's economic growth in recent years.

The rumor mongering surrounding Yukos also appears to be flaring up again. On Wednesday evening, Interfax cited sources close to the American Chamber of Commerce as saying the newly appointed head of Yukos-Moskva, U.S. citizen Steven Theede, had been called in for questioning by prosecutors.

After several hours of refusing to comment on the report, the prosecutors press office released a statement to Interfax denying it. Earlier in the evening, Yukos spokesman Hugo Erikssen denied it, too.

On Tuesday, news agency RosBusinessConsulting began a wave of speculation surrounding a possible takeover of newly merged YukosSibneft by Sibneft majority owner Roman Abramovich.

It cited an anonymous source close to the company as saying Abramovich met with Sibneft founder Boris Berezovsky and Boris Yeltsin's daughter in London recently to discuss the YukosSibneft deal. It said Sibneft president Eugene Shvidler would prepare documents to arrange the sale of a controlling interest in YukosSibneft to Abramovich.

Shvidler is expected to be elected chairman of the new company at its first shareholders meeting Friday.

Core Yukos shareholder Leonid Nevzlin, who is the beneficiary of a 50 percent stake in Group Menatep, Yukos' parent company, played down the report in an interview in Nezavisimaya Gazeta published Wednesday.

"The shareholders have not prepared a decision to hand over a controlling stake to the shareholders of Sibneft," he said. "And if someone prepared this, I need to understand the justification these people had to make such decisions. There is a certain legal procedure for preparing for the shareholders meeting and for decision-making there. Therefore, I think nothing unexpected will happen at the shareholders meeting."

Adam Landes, a senior energy analyst at Renaissance Capital, said Abramovich could be poised to fill a power vacuum at the company.

"It's a question of who protects the walls, not just of everyday operations. There needs to be someone who can cooperate with the authorities," Landes said. "Abramovich is the only major shareholder left. The others are either in prison or in exile."

A spokesman for Menatep, Yury Kotler, said newly appointed Menatep chairman Steven Curtis would vote on behalf of Menatep's shareholders. He said the arrest of the stake in Yukos did not have any impact on shareholders' voting rights and only restricted the transfer of the shares. He would not comment on the speculation that Abramovich might take over.