RUSSIA: OIL GIANT YUKOS FAILS TO RESOLVE A $3.4 BILLION TAX DISPUTE WITH THE RUSSIAN GOVERNMENT
Record ID:
344993
RUSSIA: OIL GIANT YUKOS FAILS TO RESOLVE A $3.4 BILLION TAX DISPUTE WITH THE RUSSIAN GOVERNMENT
- Title: RUSSIA: OIL GIANT YUKOS FAILS TO RESOLVE A $3.4 BILLION TAX DISPUTE WITH THE RUSSIAN GOVERNMENT
- Date: 6th July 2004
- Summary: (EU) MOSCOW, RUSSIA (JULY 07, 2004) (REUTERS) 1. VARIOUS EXTERIORS OF YUKOS HEADQUARTERS (5 SHOTS) 0.28 2. DIRECTOR OF YUKOS INTERNATIONAL DEPARTMENT HUGO ERIKSSON IN OFFICE; CU YUKOS SIGN ON TABLE (2 SHOTS) 0.38 3. (SOUNDBITE) (English) DIRECTOR OF YUKOS INTERNATIONAL INFORMATION DEPARTMENT, HUGO ERIKSSEN, SAYING: "I would have hoped that YUKOS had the answer to that question (What will happen to YUKOS in the next 24 hours?). What we do know is that when the time limit expires for YUKOS to pay voluntarily the $3.4 billion that the government demands we pay, YUKOS will not be in the position to do that. YUKOS has slightly more than $1billion in cash in its acounts but the accounts and the assets of YUKOS have been frozen. So, as long as the government (doesn't) give(s) us more time to pay back what we owe the government, then we will technically be insolvent." 1.10 4. CU: OBJECTS ON DESK 1.15 5. (SOUNDBITE) (English) ERIKSSEN SAYING: "It is very difficult for me to tell. This is, as a matter of fact, a political decision. I have already described to you the technical difficulties that YUKOS, as a hugely profitable oil company will have, and that leaves it with the government. Do they want to keep YUKOS alive or not?" 1.37 6. EXTERIOR OF YUKOS HEADQUARTERS 1.42 7. BRITISH FOREIGN MINISTER JACK STRAW IN RUSSIAN FOREIGN MINISTRY RECEPTION HALL WITH RUSSIAN FOREIGN MINISTER SERGEI LAVROV 1.51 8. (SOUNDBITE) (English) BRITISH FOREIGN MINISTER JACK STRAW, SAYING: "Can I say that this is an internal matter? Obviously we have direct British interest in it as Patricia Hewitt made clear when she was here a week ago. Britain is the largest single foreign investor in the Russian Federation and I know that Minister Lavrov and the whole of the Russian government fully appreciate the need for there to be a predictable and stable climate in which this foreign investment can both continue and flourish." 2.24 9. WIDE OF STRAW AND LAVROV 2.31 (EU) MOSCOW, RUSSIA (JULY 06, 2004) (REUTERS) 10. RUSSIAN STOCK TRADERS ON TRADING FLOOR OF ALFA BANK 2.38 11. SCU: TRADING SCREENS 2.43 12. CU/SV'S: TRADERS (3 SHOTS) 3.01 13. CU: "BEAR MARKET" STATUE 3.06 14. CU/SV: TRADERS (2 SHOTS) 3.17 (EU) GRAPHICS (JULY 07, 2004) (REUTERS) 15. CHART OF YUKOS SHARE PRICE 3.23 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 21st July 2004 13:00
- Keywords:
- Location: MOSCOW, RUSSIA
- Country: Russia
- Reuters ID: LVA155YEB26P3XT9Q2I9RP4S4FH1
- Story Text: Russian oil giant YUKOS fails to meet tax repayment
deadline.
Russian oil major YUKOS has failed to resolve a
$3.4 billion tax arrear dispute with the government and is
now waiting to see if authorities will begin confiscating
its property after a midnight (2000GMT, July 7) deadline.
Billionaire Mikhail Khodorkovsky, YUKOS' main owner who
is on trial for tax evasion and fraud, was said by his
lawyer to be ready to give up control of the firm to save
it from seizure.
Company officials said they were continuing last-minute
talks just hours before the deadline, but had failed to
reach an agreement.
YUKOS international press secretary, Hugo Erikssen,
said that if nothing else changed, YUKOS would be insolvent
within a few hours.
"What we do know is that when the time limit expires
for YUKOS to pay voluntarily the $3.4 billion that the
government demands we pay, YUKOS will not be in the
position to do that. YUKOS has slightly more than $1billion
in cash in its acounts but the accounts and the assets of
YUKOS have been frozen. So, as long as the government
(doesn't) give(s) us more time to pay back what we owe the
government, then we will technically be insolvent," said
Erikssen.
Erikssen said he believed that the government could
reach a compromise if it wanted, but that it was carrying
out a political decision.
"This is, as a matter of fact, a political decision. I
have already described to you the technical difficulties
that YUKOS, as a hugely profitable oil company will have,
and that leaves it with the government. Do they want to
keep YUKOS alive or not?" Erikksen said.
The Paris-based Organisation for Economic Cooperation
and Development released a report on Wednesday slamming
Russia's handling of the YUKOS case, saying legal action
against the oil firm and its owners represented "highly
selective law enforcement."
British Foreign Secretary Jack Straw, at a meeting in
Moscow, refused to comment on the political merits of the
case, but said he believed Russia understood the need for a
stable investment climate.
"Can I say that this is an internal matter? Obviously
we have direct British interest in it as Patricia Hewitt
made clear when she was here a week ago. Britain is the
largest single foreign investor in the Russian Federation
and I know that Minister Lavrov and the whole of the
Russian government fully appreciate the need for there to
be a predictable and stable climate in which this foreign
investment can both continue and flourish," said Straw.
The United States has echoed concern that YUKOS might
affect foreign investors. The Department of State said that
foreign investors had been worried by the government's
treatment of YUKOS.
Portfolio investors have said that Russia remains a
favourite investment destination due to its strong
macroecnomic fundaments, high global crude oil prices and
cheap valuations. However, investors have also warned that
it would be wise to stay clear of assets owned by rich
Russian businessmen until the YUKOS crisis is resolved or
proven to be an isolated case.
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