02 December 2004, 19:26 Business

Yukos is being prevented from dying

Irina Kryuchkova The authorities can be considered to have disrupted the meeting of YUKOS shareholders on December 20. The registrar, M-Reestr, refused to participate in the meeting. Yukos will not have time to change the registrar before the meeting, lawyers believe, therefore, there will be no counting commission at the meeting. This means that there will be no decision to liquidate the company, which would not allow the authorities to sell off YUKOS assets at their discretion.

Russian authorities are trying to prevent an extraordinary meeting of Yukos shareholders, who could decide to liquidate the company on December 20, Reuter reported on Thursday.

On Thursday morning, information appeared that the authorities were putting pressure on the YUKOS registrar, the M-Reestr company, which was supposed to perform the functions of the counting commission at the meeting.

And towards the evening, the Petroleum Information Agency reported that the board of directors of M-Reestr CJSC notified YUKOS management of the inappropriateness of the CJSC's participation in holding an extraordinary meeting of shareholders of the oil company.

The M-Reestr company refused to give official comments to Gazeta.Ru. An ANI source explained M-Reestr’s actions by external pressure, in particular from the state. According to the source, on the board of directors of CJSC M-Reestr, the majority of seats are occupied by representatives of companies controlled by the former general director of CJSC Volna Andrei Krainov , the third defendant in the case of Mikhail Khodorkovsky and Platon Lebedev , who is not in prison, but is under a subscription to not allowed to leave.

As Gazeta.Ru already reported, on Tuesday YUKOS shareholders received materials for an extraordinary meeting of shareholders on December 20, where a choice is expected to be made between liquidation and bankruptcy of the company.

The materials for the meeting note that if a decision is made to liquidate YUKOS, the issue of bankruptcy will be removed from the agenda. When approving a decision on liquidation, the company's shareholders are asked to approve the composition of the liquidation commission, as well as the procedure and timing of the company's liquidation. Six top managers of the company have been proposed to the liquidation commission, to which the powers to manage the affairs of YUKOS are transferred.

If a decision is made to liquidate, the commission will notify the company's creditors. Within two months, creditors will have to present their demands to Yukos .

If the company does not have enough money to pay creditors, the liquidation commission (and not the bailiffs) will begin selling the company's property.

After satisfying all creditors' claims, the remaining property of YUKOS will be distributed among its shareholders.

Analysts and lawyers have already noted that liquidation is the best option for YUKOS shareholders and the worst option for the government, which intends to sell off the all production and processing assets of YUKOS.

As Zenit Bank analyst Evgeny Suvorov told Gazeta.Ru , according to Russian law, if a decision is made to liquidate the company, all payments by YUKOS on tax claims will be automatically stopped. And it will not be possible to sell the company’s subsidiaries for debts.

Analyst Suvorov is confident that the auction for the sale of Yuganskneftegaz was scheduled precisely for December 19 (the day before the meeting of YUKOS shareholders) in order to have time to sell the main subsidiary of YUKOS.

Mikhail Motrich, a lawyer at Monastyrsky, Zyuba, Stepanov and Partners, believes that, purely theoretically, the registrar’s refusal to participate in the shareholders’ meeting should not lead to its cancellation.

But in reality, the refusal of M-Register will definitely lead to the disruption of the meeting.

To the company of Gazprom

Indian Oil & Natural Gas may apply to participate in the auction for the sale of Yuganskneftegaz together with Gazprom, the Indian newspaper Economic Times reports, citing an anonymous source.

Head of Oil & Natural Gas Corp. Subir Raha has already said that the company would be interested in buying Yuganskneftegaz. Acquiring a 20 percent stake in a joint structure with Gazprom would allow Indian Oil & Natural Gas to double oil production.

According to Zenit analyst Evgeny Suvorov, the participation of both Indian and Chinese companies in the auction is not serious. The favorite in the bidding has already been determined - Gazprom. And the examples of the privatization of Slavneft and Stimul CJSC showed that the Russian government does not want to allow eastern “strategic partners” to own strategic resources.

“The registrar performs the functions of the counting commission, without which it is impossible to hold a meeting. Theoretically, YUKOS needs to change the registrar company, but it will not have time to do this, since there is little time left until December 20,” a lawyer from the Ekspertiza consulting group explained to Gazeta.Ru.

As lawyers note, the authorities have found the most effective way to disrupt the meeting of YUKOS shareholders. According to Mikhail Motrich, even the use of interim measures (for example, a court seizure of the company’s shares) would not prevent shareholders from voting: “The court can prohibit voting with company shares only if there is a threat of withdrawal of assets from the company. But this again will not lead to disruption of the meeting. The meeting can still be held, but the range of issues will be reduced."

Mikhail Motrich points out that the Supreme Arbitration Court has repeatedly clarified that Russian courts should not follow the lead of participants in corporate conflicts.

Yukos says that no changes will occur and the shareholders meeting will take place on December 20 as scheduled.

And the head of the department for working with issuers at M-Reestr, Elizaveta Kovaleva, told ANI: “We are currently negotiating with YUKOS, where we are discussing all the conditions for our participation in the meeting of shareholders as a counting commission, but we have not yet concluded any agreements on participation, that’s why there is nothing to terminate. But I think there won’t be any problems.”