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Last Updated: Tuesday, 28 March 2006, 17:55 GMT 18:55 UK
Bankruptcy court opens Yukos case
Yukos office
Most of Yukos' assets are expected to fall under state control
The bankruptcy hearing of stricken Russian oil company Yukos has begun in Moscow, with state oil firm Rosneft poised to snap up its remaining assets.

The bankruptcy suit was brought by a group of 14 foreign banks that were owed $482m (276m) by Yukos, but they have since sold this debt to Rosneft.

Yukos was brought to its knees after the Kremlin ordered it to pay back taxes totalling $32bn.

In 2004, a forced auction saw its main oil producing assets sold to Rosneft.

Yukos tried to delay the bankruptcy suit being heard, claiming that the company needs time to study documents, and that the proceedings should be heard in Siberia, where the firm is registered.

On Tuesday, the court put Yukos under external supervision, meaning that major decisions now have to go through a temporary manager.

State control

Eduard Rebgun, who was proposed by Rosneft, will examine Yukos' finances, determine how much it owes, draw up a list of creditors and organise a creditors' committee.

Based on the committee's recommendations, the court can decide to bring in external management or put the firm in bankruptcy administration and sell its assets.

Most industry watchers expect Yukos' assets to end up with Rosneft, boosting its value ahead of a planned $20bn stock market listing later this year, and increasing state control of Russia's energy resources.

"The government is now completely in the driving seat," said Peter Clateman, a lawyer with Russian investment group Sputnik.

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

"One way or another, the state is likely to eventually get most of the assets of Yukos."

The former head of Yukos, Mikhail Khodorkovsky, has been behind bars since October 2003 and is appealing against the verdict of a Moscow court, which found him guilty of tax evasion and fraud, and sentenced him to nine years in prison.


SEE ALSO
Yukos creditors seek bankruptcy
10 Mar 06 |  Business
Yukos hit with new $4bn tax bill
18 Jan 06 |  Business
No extradition for Yukos official
23 Dec 05 |  Business
Yukos offices are raided in probe
06 Oct 05 |  Business

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