Yukos saddled with $3bn tax bill

Yukos feels that politics played a role

Embattled Russian oil giant Yukos owes $3.3bn in back taxes and fines, the Russian tax ministry says.

The ministry accused the firm of evading taxes by setting up a web of affiliated firms.

Yukos' largest shareholder and former boss, Mikhail Khodorkovsky, has himself been in jail on tax fraud charges since being arrested in October.

Critics say the charges are an attempt by the Russian government to keep Mr Khodorkovsky out of politics.

President Vladimir Putin comes up for re-election in March 2004, and Mr Khodorkovsky was thought to have been considering a challenge.

In late December a Moscow court ruled he would have to stay in jail until 25 March.

Tax rate

Yukos insists that it has used only legal avoidance techniques to keep its tax bill down.The firm has yet to comment on the accusations.

Mr Khodorkovsky's Yukos stake is in limbo

But since the tax ministry's accusation, the first to hit the firm itself, applies only to the year 2000, analysts fear further tax demands are likely to make an appearance.

The 2000 tax bill is roughly equivalent to Yukos' net profits for 2002.

Alfa Bank in Moscow said the company's results indicated it had paid roughly the same level of tax on its profits - 21%, compared to an oil sector average of 23%.

"This can be viewed as continued pressure on the company in order to push out its core shareholders, which we feel is the government's main goal," the bank said in a note to clients.

On the other hand, the tax ministry statement suggests it accuses the company of manipulating profits to keep its taxes low.

Takeover trouble

The affair has already seen the freezing of 40% of Yukos' shares, held by foreign companies controlled by Mr Khodorkovsky.

It has also triggered the collapse of a planned merger between Yukos and smaller rival Sibneft, which would have created the world's fourth largest oil producer.

The terms under which the merger was unwound leave Yukos holding 92% of Sibneft shares.

Sibneft is currently left without a board of directors, after Yukos representatives failed to turn up on Tuesday to a shareholders' meeting.