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Last Updated: Friday, 10 March 2006, 14:19 GMT
Yukos creditors seek bankruptcy
Yukos office
Yukos came under investigation by Russian tax officials in 2003
A Moscow court has begun proceedings that could lead to the stricken Russian oil firm Yukos being declared bankrupt.

Once the country's largest oil company, Yukos was brought to its knees after the Kremlin ordered it to pay back taxes totalling $32bn (18.4bn).

Now a group of creditor banks led by Societe Generale have petitioned for the bankruptcy as they chase about $480m lent before Yukos hit trouble.

A Yukos spokeswoman said the company was surprised by the move.

"Under Russian law they would be at the back of the list of creditors, behind the employees and any tax liabilities, so you have to ask why they have done this," she said.

Yukos is currently in the process of selling off non-core assets worth up to $1bn and the banks were at the front of the queue to receive this money, she added.

The spokeswoman also said that pressure from Russian authorities may have been behind the decision by Moscow-based Yukos staff to rehire a manager who had been suspended by the company for his part in some suspicious oil trades.

Break-up

Yukos' main asset, the million-barrels-a-day Yukanskneftgaz oil field, was sold at a state-ordered auction in 2004 to pay off part of its massive tax bill.

The company that bought the field was then itself taken over by Russian state oil company Rosneft.

Former Yukos boss Mikhail Khodorkovsky, right, in a Moscow court
Mr Khodorkovsky was arrested in October 2003

But Yukos still has fields producing 450,000 barrels of oil a day, and employs 70,000 workers.

Russian authorities say Yukos used illegal loopholes to avoid tax, while the firm says it has been victimised.

It says it is being punished for the political ambitions of its former boss Mikhail Khodorkovsky, and because the Russian government wants to assert more control over the country's strategically important oil and gas assets.

Mr Khodorkovsky is serving an eight-year sentence for tax evasion and fraud.




SEE ALSO
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