Putin Says Intent Is Not To Bankrupt Oil Giant
By Burt Herman
Friday, June 18, 2004; Page A26
TASHKENT, Uzbekistan, June 17 -- The Russian government does not want beleaguered oil giant Yukos to go bankrupt, President Vladimir Putin said Thursday, addressing speculation that the firm's legal troubles were aimed at bringing it under state control.
With its former chief, Mikhail Khodorkovsky, and another key shareholder on trial on charges including fraud and tax evasion, Yukos has been fighting claims by the government that it owes $3.4 billion in taxes.
Yukos managers have warned that the company could declare bankruptcy if forced to pay the claim immediately. They told the government in a recent letter that with time and a chance to sell some of its frozen assets, Yukos could pay its debt. There was no response to the overture.
The Russian government is "not interested in the bankruptcy of such a company as Yukos," Putin told reporters on the sidelines of a summit in Uzbekistan, in a rare direct comment on the court cases against Yukos.
Putin said that Yukos's debt problems -- the claim from Russian tax authorities -- are a matter for the courts. "But the government will try to act so as not to destroy this company," he added.
Yukos shares, which had dropped sharply in recent days with growing talk of a possible bankruptcy, soared after Putin's announcement. Trading was halted with the share price up 34 percent.
Putin has portrayed the year-long investigation into Yukos and its core shareholders as part of Russia's effort to tackle corruption.
But Putin's political opponents and some foreign observers contend that the government might be motivated by a desire to reclaim some of the natural resources and enterprises sold off cheaply to private businessmen during the 1990s, or at least ensure that they are run by Kremlin-friendly executives.
That notion has added to international doubts about Putin's dedication to democracy and free-market principles as he increases his control over Russia.
© 2004 The Washington Post Company