U.S. Watching Yugansk Sale

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' 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 favoritism as well, and that affects people's view of the business climate."

During a visit to Washington on Tuesday, a defense lawyer for imprisoned former Yukos CEO Mikhail Khodorkovsky said the legal attack on the oil major reflected anti-democratic trends under President Vladimir Putin.

"He was a spy, and he remains a member of the intelligence community," Yury Shmidt said in an interview amid meetings at the State Department and with members of Congress. With a smile, Shmidt questioned President George W. Bush's conclusion, after a meeting with Putin in 2001, that "I was able to get a sense of his soul, a man deeply committed to his country and the best interests of his country."

"I know Putin well personally," Shmidt said. "He knows how to speak well, and he knows very well how to hide his true intentions."

Khodorkovsky was arrested at gunpoint a year ago and remains in jail while the state prepares to auction the crucial production unit of Yukos.

Shmidt insisted the case against him was purely political.

"What we are up against is the full and entire machinery of the government," said the one-time Soviet dissident human rights activist.

And, Shmidt said, the case is part of a larger process by Putin to throttle political opponents.

"If they had any sense, there would be a fair trial, with an independent court, and we would not be here now," Shmidt said in an interview in the State Department lobby.

Trade in ruble shares of Yukos was suspended for an hour on Wednesday, the MICEX said, after shares dived by 14 percent as the firm seemed destined to lose its key assets.

Trade was halted at 6.15 p.m. and will resume on Thursday. The shares stopped trading at 93.99 rubles. Yukos' dollar shares closed 21.7 percent lower at $3.25.

Surgutneftegaz is not now considering whether to bid for Yuganskneftegaz, Interfax reported, citing Surgut chief executive Vladimir Bogdanov. "We are not yet considering the question," he told reporters. "No one is selling yet."

(From The Moscow Times, 21.09.2004)