U.S. urges Russia not to sell YUKOS asset cheaply

The United States said it was concerned about reports that the main asset of beleaguered Russian oil giant YUKOS might be sold at a price below its fair market value.
The Russian government plans to auction Yuganskneftegaz next month to raise cash to meet YUKOS's crippling tax bills.

"The reason we care is because a sale at less than fair market value constitutes, first of all ... one has to assume there's some element of coercion or a forced sale involved," State Department spokesman Richard Boucher told reporters on Tuesday.

"And, second of all, if sales are not made in the open market at fair market value, one has to assume there's an element of favouritism as well, and that affects people's view of the business climate."

The Russian government wants to sell Yugansk to recover about $8 billion in back taxes from YUKOS.

It had hired investment bank Dresdner Kleinwort Wasserstein to value Yugansk and has picked its worst scenario valuation of $10.4 billion instead of a recommended $14-$17 billion.

YUKOS's tax woes are widely seen as part of a broader campaign which many in business circles see as the Kremlin's punishment of YUKOS's main shareholder, Mikhail Khodorkovsky, for his political activities. Khodorkovsky is now on trial for fraud and tax evasion.

Source: Reuters

(From Putin.ru, 20.10.2004)