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The Taxman takes control of Russneft - company stock frozen

The Moscow Arbitration Court confirmed that stock in Mikhail Gutseriev's Russneft has been frozen in connection with the suit filed by the Federal Tax Service.

Sources say that the tax service is claiming a controlling share in the company. Experts note that the situation is looking more and more like a repeat of YUKOS, but Gutseriev still has a chance to avoid the fate of Mikhail Khodorkovsky. The Moscow Arbitration Court confirmed that stock in Russneft oil company has been frozen. ZAO Servis-reestr, the company's registrar, has been prohibited to perform transfer operations with the disputed stock. The court ruled to freeze the stock in question in seven cases involving firms that own it. There is another case in which the respondent is Russneft shareholders. No stock has been frozen in it yet.

The court was unable to say what quantity of stock was frozen. Russneft declined to comment on the question. The Federal Tax Service is claiming that the resale of Russneft stock through a chain of 11 firms constitutes an antisocial transaction. The stock was sold to affiliated parties at its nominal price, which is lower than its market price, and, as a result, tax payments were evaded, according to the tax service. The claimant makes reference to article 169 of the Civil Code of the Russian Federation, which permit the annulment of transactions found to be “contrary to the bases of lawfulness and morals” with the full amount of money received through the transaction receivable by the state.

A source familiar with the contents of the suits says, however, that the tax service is trying to claim “just over 50% of the stock” in Russneft. Russneft is the youngest oil company in Russia, founded late in 2003. Its main owner and beneficiary is former Slavneft president Mikhail Gutseriev, who has stated that he owns 70% of the stock in the company, with the rest belonging to his relatives. The company produces 17 million tons of oil per year and owns two refineries and about 300 filling stations. Industry experts think it possible that the authorities´ attack is not directed against Russneft, but rather against Gutseriev personally.

“I don't think Rosneft or Gazprom needs that asset. Russneft works on complex deposits and their profitability is low,” commented a finance analyst. He thinks that it is Gutseriev who has fallen from grace and the chance to “draw off” Russneft is simply “a pleasant collateral bonus.” An Interior Ministry investigative committee has already made charges against Gutseriev.

Analysts note that the fall of YUKOS began as a consequence of a conflict between company chief Mikhail Khodorkovsky and Russian authorities. Another finance analyst thinks, however, that Gutseriev can escape Khodorkovsky's fate by relinquishing control over Russneft. The first preliminary hearings in the cases on annulling the transactions with the company's stock are scheduled for June 29. The court's ruling, and the freezing of the stock, may last several months. (www.petrolplaza.com)