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. Last Updated: 07/27/2016

Yukos: Yugansk Plans to Bankrupt Us

bloombergThe company's bankruptcy would facilitate the seizure of other Yukos assets.
Yuganskneftegaz, controlled by state-owned Rosneft, plans to file a bankruptcy case against its former owner Yukos, which is facing spiraling liabilities and destruction, a senior Yukos executive said Tuesday.

Yugansk plans to file the suit against Yukos "in the near future" in the Moscow Arbitration Court, Alexander Temerko, a senior Yukos vice president who is set to leave the company, told Interfax. He declined to provide any more details.

Bankrupting Yukos in a Russian court would give the authorities more flexibility in selling off the remaining assets of the Yukos empire after a messy battle between its core shareholder, Group Menatep, and the Kremlin that started in 2003.

Yugansk, once Yukos' biggest unit, was auctioned off in December, ostensibly to recoup part of a $28 billion tax claim against the oil giant. Rosneft later said it bought the shell company that won the auction.

Ironically, Yugansk could now deal the fatal blow to Yukos by way of bankruptcy -- exactly the same legal instrument Yukos wielded in a Houston court in a futile attempt to stop the sale of Yugansk.

Yukos said in a statement Tuesday that it was abandoning attempts to seek bankruptcy through the U.S. court system.

Alexander Shadrin, a Yukos spokesman, said he had nothing to add to Temerko's statement, and Rosneft could not be reached for comment.

Rosneft, through Yugansk, earlier this month filed documents in a Moscow court seeking $11 billion in damages from Yukos and demanding the return of property moved out of Yugansk.

Temerko's comments came on media reports that the Prosecutor General had informed the heads of Yukos' two largest remaining production units that they could seek $11.5 billion in damages from Yukos for shifting profits by selling underpriced oil.

Investigators from the Prosecutor General sent letters to Pavel Anisimov, general director of Samaraneftegaz, and Sergei Shimkevich, general director of Tomskneft. The two units produce about 8 percent of the country's oil.

The Prosecutor General's Office on Tuesday said the letters did not bind the two men to take any action.

"It is a procedure, in accordance with the law, under which investigators informed the heads of these companies of their right to take legal action to recover the damages," said a representative of the prosecutor's office.

"It is a simple procedure," the representative said. "Of course they are not obliged to take action."

But with both men facing investigations of their companies and Samaraneftegaz's Anisimov facing criminal charges, the pressure to cooperate is huge.

Anisimov is under investigation for his management of the unit, and the Samara region prosecutor is asking permission from the Supreme Court to charge Anisimov with evading 6 billion rubles ($214 million) in taxes for the unit from 1999-2000, news agencies have reported.

Anisimov is reportedly outside the country. Regional authorities have opened a criminal case against Tomskneft's for overproducing crude in 2003. Both Anisimov and Shimkevich could not be reached for comment Tuesday.

In an interview published Tuesday in Izvestia, Yukos board chairman Viktor Gerashchenko said that Yugansk's production equipment was transferred to Yukos units three years ago, indicating Rosneft may have bought a company with seriously diminished assets.

"I don't understand how [valuators] and the purchaser could have missed the fact that only holes [pumps] remained on Yugansk's balance sheet. There are licenses for the fields but all the equipment was transferred to units of Yukos about three years ago," he said.

In the wide-ranging interview, Gerashchenko said "half" of Yukos' seven foreign board members had sent in resignation letters. He said he was astonished that Rosneft didn't seem to have understood what it was buying.

"This happens when things are done by order and not with serious analysis," Gerashchenko said in the interview, which was accompanied by a picture of the former central banker sitting behind the controls of a bulldozer pushing masses of what looked like dirt or manure.