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Yukos oil ghost hit hard Rosneft's shares

Shares in Russia’s state oil company, Rosneft, slumped Wednesday after the company was said to have warned its trading partners that a British court could seize assets under a lawsuit filed by former executives of Yukos Oil.

 

Shares in Russia’s state oil company, Rosneft, slumped Wednesday after the company was said to have warned its trading partners that a British court could seize assets under a lawsuit filed by former executives of Yukos Oil. An overseas branch of Yukos, now organized as a foundation based in the Netherlands, won a $380 million lawsuit against Rosneft in a Dutch court in 2007 but has been unable to collect the award. The case stemmed from disputes during the bankruptcy proceedings against Yukos in Russia in 2007. The Yukos representatives are trying to collect in commercial court in Britain, where Rosneft has a trading business and lists its shares.

 

The case is one of several pending before European arbitration panels, the European Court of Human Rights and elsewhere stemming from the dissolution of Yukos, once the largest Russian oil company. It was dismantled and filed for bankruptcy in a politically tinged tax-fraud case from 2003 to 2007. Its most valuable assets were acquired by Rosneft, in which the Russian state owns a majority stake. Rosneft notified trading partners and banks about the litigation, Reuters reported Wednesday, citing oil traders. The company pumped 2.1 million barrels of crude a day last year, about a fifth of Russia’s total output.

 

The litigation in London poses only a moderate risk to Rosneft, which had revenue of $46.8 billion and profit of $6.5 billion in 2009. But a successful collection by Yukos could set a precedent for larger claims still being adjudicated. In one of those cases, former Yukos shareholders and executives are suing Russia in the human rights court for about $100 billion, which they claim is the entire value of Yukos at the time of what they consider an expropriation.

 

A Rosneft spokesman did not answer calls Wednesday. A woman who answered the phone at the company’s investor relations department declined to comment and said Rosneft would later post a notice on its Web site. The company’s shares slid 1.7 percent in Moscow on Wednesday on a day that the exchange rose about 1 percent.

Author: Andrew E. Kramer

Source : The New York Times