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. Last Updated: 07/27/2016

Khodorkovsky No Longer a Menatep Owner

Jailed oil baron Mikhail Khodorkovsky is no longer a shareholder of Group Menatep, the holding company through which he controlled the embattled Yukos oil major, his lawyer Anton Drel said Wednesday.

On Oct. 20, several days before he was arrested at gunpoint in Siberia, Khodorkovsky pulled out of the company that formed the core of the financial empire he built in the 1990s, Drel said. The transfer came on the same day as a leading prosecutor announced that Khodorkovsky would be called in for questioning -- a sign the tycoon was the next target in a widening probe of core Yukos shareholders that began with the arrest of his partner, Platon Lebedev, three months earlier.

"This was a planned step," Drel said in a telephone interview. Shortly after his arrest, Menatep revealed that Khodorkovsky had handed over control of a special trust that owned 50 percent of Menatep. But Drel said Wednesday that Khodorkovsky had relinquished all his shares in the holding, including another 9.5 percent that he held personally. At the time of his arrest, the 59.5 percent Khodorkovsky held equaled roughly 26 percent of Yukos, worth $7.8 billion.

Drel would not say, however, whether Khodorkovsky had sold the shares or merely transferred them to a nominee to be held in trust. He said he could not disclose the name of the new holder of the shares.

He said, however, the change in ownership of Menatep had not affected control over Yukos. "The system of management over the controlling stake was not connected to concrete people, but was made on the basis of agreements between shareholders. There is a special voting procedure," he said. He would not elaborate further.

The revelation came a day after Menatep said it would post changes to the group's ownership structure on its web site, Some analysts said the changes could still mean that control of Yukos may have changed hands in the seven months of unrelenting pressure on key stakeholders, all of whom have been charged with either massive fraud or tax evasion or both.

Most industry watchers, however, said any changes to Menatep's structure were likely to be superficial, a simple shuffle of shares from one shell company to another in order to defend them from attack.

On Wednesday, however, neither Menatep nor Drel would shed light on the details of the company's new structure. "There is no deadline for disclosure," Menatep spokesman Yury Kotler said. "We are a private company and we are not obliged to disclose who owns what."

Less than two years ago, Menatep was singing a very different tune. In the summer of 2002, the company stunned the market by becoming the first major Russian company to disclose its shareholder structure, putting an end once and for all to frequent criticisms it received for being one of the most opaque companies in the country.

According to that disclosure, Group Menatep owned 61.01 percent of Yukos via two offshore vehicles -- Yukos Universal and Hulley Enterprises. The disclosure also listed the holdings of Khodorkovsky, Lebedev and other core shareholders of the group. Following a share issue last year, the group's stake was reduced to 44.1 percent.

But shortly after Khodorkovsky's arrest, Menatep quietly pulled its shareholder list off its web site, fueling speculation that major changes were in the works. It still has not been replaced. Kommersant reported Tuesday that the new structure would be posted soon, but Kotler said Wednesday company lawyers were still working on it and could not say when or if it would appear.

Less than a week after Khodorkovsky's arrest, prosecutors took the unprecedented step of freezing 44 percent of Yukos' shares as collateral for the damages they said Khodorkovsky and other core Menatep shareholders inflicted on the state. After Menatep complained, prosecutors unfroze 4.5 percent.

Drel said Wednesday that the fact that Khodorkovsky did not own any shares in Menatep, which owned the frozen stake via Yukos Universal and Hulley Enterprises, meant that the prosecutors' action could be unlawful. "It's possible their actions were unjustified," he said.

Analysts said Yukos' ownership structure was getting murkier and murkier, further ratcheting up the risks for investors. "Everything is getting more and more opaque," said Paul Collison, energy analyst at Brunswick UBS.

But most believed Khodorkovsky had simply shifted his shares to another structure in an effort to defend his empire from attack. "Nobody is going to buy the story that Khodorkovsky is no longer a shareholder. His stake has probably been transferred to another front company. These people do these things all the time," said Steven Dashevsky, oil analyst at Aton.

Some market players suggested Khodorkovsky and other key shareholders could be caving in to pressure from Roman Abramovich, the owner of rival Sibneft, who reportedly launched an abortive takeover attack of Yukos last year and is seen to be loyal to the Kremlin. Other investors, however, said that theory was highly unlikely.

"Abramovich has been selling down his positions in Russia rather than increasing them," said William Browder, director of Hermitage Capital Management.

News that Khodorkovsky had moved out of Menatep came as Yukos announced another defensive move. The deputy head of Yukos' public relations department, Alexander Loktev, said Wednesday the company was going to increase the amount of money is spends on social projects to 3.12 billion rubles in 2004 from 2.84 billion rubles last year. He said Yukos' most effective social project was a fund to develop small businesses in Siberian towns, Interfax reported.

President Vladimir Putin has called on big business to do more for society.

A source close to Yukos also confirmed Wednesday that the company was considering selling its stakes in regional electricity generation companies ahead of one of Russia's last massive privatization programs, which is part of the overhaul of electricity monopolist of Unified Energy Systems.

Yukos had bought blocking stakes in four regional electricity generating companies -- Belgorodenergo, Kubanenergo, Tambovenergo and Tomskenergo -- ahead of the UES restructuring, according to the company's financials for 2002.

The company official said the oil firm had hoped to translate the stakes into controlling ones during the UES revamp, but when it became clear that that would not be possible the company was considering whether to liquidate the stakes. He said, however, that no final decision had been made.

Analysts said Yukos' electricity holdings were worth about $100 million.