Putin Lashes Out At U.S. and E.U.

President Putin defends auction of Yukos unit at news conference. (Dmitry Dukhanin -- Bloomberg News)

Kremlin political consultant Sergei Markov said in an interview before the news conference that Putin was worried about alleged anti-Russian sentiment among Yushchenko's team.

Putin defended the acquisition of the company that won the auction for the Yukos subsidiary by Rosneft, a government-controlled company. He said the privatization of many state-run companies after the dismantling of the Soviet Union had been illegal.

"You all know very well how privatization took place here in the 1990s and how, using various tricks, and sometimes violating the laws that were in effect at the time, many market participants got hold of state property worth many billions," Putin said. "Today, the state, using absolutely legal market mechanisms, is securing its interests. I consider this to be quite normal."

He derided a ruling by a bankruptcy judge in Houston last week, after Yukos filed for Chapter 11 protection there. The company sought to prevent the auction of the oil fields, and the judge barred the Russian natural gas monopoly Gazprom from bidding. The asset will now likely fall to Gazprom anyway, because the state plans to fold Rosneft into Gazprom, leaving the government with a controlling interest in the new company.

Putin said he was "amazed" by the decision of the Houston judge, who granted Yukos a temporary injunction barring the sale.

"I'm not even sure that [the judge] knows where Russia is located," he said.

Yukos officials said Thursday they would continue to pursue legal action following the auctioning of Yuganskneftegaz. But analysts said the government purchase could be protected from litigation under the principle of sovereign immunity.

"They did not even bother to attempt to hide their contempt for international law, international public opinion, or majority and minority shareholders," said Group Menatep, which owns 53 percent of Yukos, in a statement after Putin's news conference.