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. Last Updated: 07/27/2016

Court Freezes Russneft Assets

Itar-TassThe company's Moscow offices are just part of the Russneft assets frozen.
The Interior Ministry announced Wednesday that a Moscow court had granted its request to freeze the assets of Russneft, the oil company owned by billionaire Mikhail Gutseriyev, who is facing a tax probe and what he called "unprecedented hounding" from the state.

Moscow's Lefortovsky District Court ordered all of Russneft's assets frozen on July 31, a spokeswoman for the Interior Ministry's investigative committee said late Wednesday.

"In proceeding with the criminal case over nonpayment of taxes and illegal business activities ... we have requested the freezing of [Gutseriyev's] assets, and the court has granted that request," she said. "This gentleman is accused of these crimes, and while the investigation is proceeding, his assets will remain frozen."

Russneft vice president Eduard Sarkisov said the company had not received notice of the order from either the Interior Ministry or the court.

"As of now, Russneft and all of its subsidiaries are working as normal and meeting all of our supply commitments," Sarkisov said.

The announcement was the second from a court this week concerning the company's assets.

On Monday, Moscow's Tverskoi District Court said it had reviewed the same request from the Interior Ministry, but had refused to issue a freeze order.

A ministry spokesman confirmed Wednesday that the request had been filed with the two courts simultaneously, "in order to be sure," he said, declining to elaborate or give his name.

Pavel Gritsevsky, a lawyer with Moscow-based firm Status, said multiple filings were common practice as a form of "insurance" in legal matters.

"If I were unsure which of the two courts would grant this request, I would have done the same thing in the prosecutors' place -- filed with both courts in the hope that one of them gives you what you want," Gritsevsky said. "It's a tactical move."

In a faxed statement, the Interior Ministry said the request to freeze the assets fell within the jurisdiction of the Tverskoi District Court "because of the location of the preliminary investigation." The request also fell under the jurisdiction of the Lefortovsky District Court "because of the location of the holder of the company's assets," the statement said.

Gutseriyev owns an 80 percent stake in Russneft.

While the company's assets are frozen, Gutseriyev will not be able to sell them or transfer them in any way, Gritsevsky said.

But Sarkisov, the Russneft vice president, said it was not yet clear that this was the case.

"There are different legal formulations for arrested assets, and I don't know which one applies in our case," he said. "But most likely, yes, it is true that we cannot sell the assets."

Last week, Gutseriyev said he had been forced to sell his stake in the company after "unprecedented hounding" from authorities. He later retracted the statement, saying the choice to sell the company was in line with the wishes of Russneft's shareholders.

Basic Element, owned by billionaire Oleg Deripaska, has said it is in talks to buy the company.

Basic Element spokesman Sergei Rybak said Wednesday that his company had applied to the Federal Anti-Monopoly Service for clearance to buy a controlling stake in Russneft before the freeze order was granted. After learning of the court's decision, Rybak said he did not know how it would affect Basic Element's attempts to purchase the company.

"For now, we are just waiting for some response" from the anti-monopoly service, he said.

Deripaska has made a number of big-ticket corporate purchases over the last year, leading to much speculation that he has the Kremlin's blessing to expand his holdings both at home and abroad. Gutseriyev's troubles were believed to date back to his attempts to buy several Yukos assets without Kremlin approval this year, but Russneft said last month that on Gazprom's request, it had dropped plans to buy any of Yukos' remains.

The Federal Tax Service has targeted Russneft with a total of eight lawsuits against 11 companies that are or have been shareholders in the oil firm, the country's seventh largest, producing 300,000 barrels per day. On July 23, a Moscow court upheld a 3.4 billion ruble ($134 million) lawsuit against the firm on tax evasion charges.

Calls to the Lefortovsky and Tverskoi district courts and to the Moscow City Court went unanswered Wednesday evening.

Staff Writer Max Delany contributed to this report.