1/11/2014 2:42
RIA Novosti

Business

UPDATE: Court rejects Yukos appeal

13:02 08/09/2005

MOSCOW, September 8 (RIA Novosti) - The Arbitration Appeals Court of Moscow has rejected an appeal filed by embattled oil major Yukos, which wanted the court to freeze 76.79% of the shares of its former core production unit Yuganskneftegaz.

Yukos submitted the appeal as part of its claim to dispute the sale of Yuganskneftegaz.

An arbitration court had earlier rejected this appeal, after which Yukos lawyers challenged the court's ruling in an appeals tribunal.

The Russian Federal Property Fund, some Russian companies and the Russian Finance Ministry as the administrator of budget funds were the defendants in the proceedings.

Yukos said in its claim that the Yugansk auction had been held "with numerous violations of Russian legislation and international law, including the Convention for the Protection of Human Rights and Fundamental Freedoms." The Yukos lawyers said the Property Fund had unjustifiably understated the price of the initial share package.

The Yukos lawyers also said the Property Fund had acted in breach of the procedure for announcing and holding the tenders. The Bailiff Service passed a decision on auctioning off the share package of Yuganskneftegaz to recover back taxes on November 18, 2004. The embattled oil giant owed the budget over $20 billion.

On December 19, 2004, the Russian Federal Property Fund sold Yuganskneftegaz for $9.35 billion. The Yukos asset went to Baikal Finance Group, a little known company later acquired by state-run oil giant Rosneft.

According to the Russian Justice Ministry, Yukos owed the budget over $2 billion in back taxes as of June 29, 2005.

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