Professional Documents
Culture Documents
March 2001: YUKOS lists American Depositary Receipts (ADRs) on the New
York Stock Exchange
2001: YUKOS becomes the first Russian oil company to begin quarterly
reporting of fully consolidated financial statements
2001: PwC begins to market its services in Russia by referring to its role in the
development of YUKOS-style financial reporting practices
2002: YUKOS principal shareholder group becomes the first of any large
Russian oil company to disclose its ownership structure to the public
2002: YUKOS achieves the highest ratings possible in all categories on its
corporate governance index
May 2002: YUKOS is the only Russian company to be ranked among the top
ten largest oil and gas companies worldwide by market capitalisation
Late 2002: By the fourth quarter of 2002, YUKOS is the largest oil company in
Russia by daily crude oil production, accounting for 36% of the production
increase in the country for that year
2003: With most of the objectives in the original Charter achieved, the
YUKOS Board of Directors approve a new Corporate Governance Charter,
based on the Organisation of Economic Cooperation and Development
principles of corporate governance
January 2003: Moodys Investor Services rates YUKOS as Ba2, at that time
the highest long-term and foreign currency issuer ratings for any private
Russia company, equivalent to the Russian government
!
The YUKOS Attacks
19 September 2003: 1st tax certificate of YUKOS. The tax certificate shows
that all arrangements are in order and the usual process adhered to
3 October 2003: YUKOS and Sibneft merge in a deal that was supposed to
make the combined company the largest in Russia
23 October 2003: 2nd tax certificate of YUKOS. The tax certificate shows that
all arrangements are in order and the usual process adhered to
17 November 2003: 3rd tax certificate of YUKOS. The tax certificate shows
that all arrangements are in order and the usual process adhered to
8 December 2003: Despite the clean bill of health for YUKOS tax liabilities
granted by the Ministry in 2003, a re-audit of the 2000 tax liabilities is
announced
29 December 2003: Just 21 days later, and exactly three days before the
statute of limitations falls on the 2000 tax liabilities, the audit of liabilities of
YUKOS for 2000 by the tax authorities is announced, seeking $3.3 billion in
additional taxes
15 April 2004: A little under twenty-four hours after the alleged tax liability is
announced, the Tax Ministry files a secret court claim to recover the full sum,
which is immediately granted. The court agrees with the application by the
Ministry and the Bailiff service and a freezing order on all principal assets,
bank accounts and transfers is awarded, despite the fact that this would
prevent YUKOS from making any payment against the alleged liabilities
22 April 2004: A request of YUKOS to the Tax Ministry and the Bailiff service
to off-set any liabilities during the legal process, show good will and remove
the freezing orders, by offering the companys shares in Sibneft is made. The
value of these shares secured during the share-swap of the merged company
achieved in 2003 could immediately pay off the apparent tax debt
23 April 2004: Just 24 hours after the request is made to the Bailiff service
and the Tax Ministry, the Moscow District Court rejects the request to limit
the frozen assets to the Sibneft shares
23 April 2004: Seeing the failure of the rule of law in Russia, the Board of
YUKOS approves filing an initial submission with the European Court of
Human Rights to state that it rights to protection of its property were being
breached
26 April 2004: Banks warn YUKOS they may default on credit of $1 billion
loan
17 and 18 May 2004: The General Prosecutors Office and the Tax Ministry file
a submission of 70,000 pages of exhibits for hearing of the tax claim for 2000
against YUKOS. The files are not shared with YUKOS or its legal counsel
21-26 May 2004: The Moscow District Court commences a hearing of the
2000 tax assessment in the first instance, despite YUKOS disputes of
breaches of process, rule of law and lack of meeting-established court protocol
28 May 2004: Court rejects the YUKOS application for dismissal and refers
the YUKOS liabilities to the bailiffs for a payment scheme to be devised
adding fines, surcharges and additional collection taxes paid directly to the
bailiff services over and above the original demand.
June/July 2004: Despite the due process of law in the Russian courts and
prior to the courts ruling on the application against YUKOS by the tax
authorities, some weeks later the tax authorities begin confiscating cash from
YUKOS bank accounts, as well as agency accounts maintained by YUKOS for
its production subsidiaries
1 June 2004: Tax authorities receive the judgment on the 2000 tax
assessment and the alleged liabilities against YUKOS. It supports the
application made by the tax authorities.
03 June 2004: The courts reject an appeal against the freezing orders on
YUKOS assets by the tax authorities and the General Prosecutor of 15 April
2004
18 June 2004:Less than 20 days after the initial hearing and with no further
access to documentation, the Moscow courts hold the hearing of appeal
initiated by YUKOS regarding the alleged 2000 tax assessment
20 June 2004: Despite the fact that no ruling of the appeal has been given, the
Russian Federation authorities announce their intention to sell
Yuganskneftegaz (YNG), YUKOS main production subsidiary worth an
estimated $20 25 billion. By this point, the only tax reassessment levied
against YUKOS was the 2000 assessment of $3.72 billion, much of which was
already paid off due to the sweeping of the companys bank accounts
29 June 2004: Moving at an phenomenal rate, just 10 days after the hearing,
YUKOS receives the judgment on its appeal against the alleged liabilities of
tax assessment of 2000
30 June 2004: 24 hours later, despite the sweeping of bank accounts, the
court issues a payment order tax assessment for 2000 (including penalty and
penalty interest, not to mention the bailiff service fees of some 8% of the
original sum to which YUKOS is apparently liable) of $3.37 billion against
YUKOS. Despite the fact that all assets and bank accounts are already frozen,
new freezing orders are imposed by the court
Late June 2004: YUKOS tries to settle claims with the Ministry of Finance,
proposing a buy-out of some of its shares from GML as part of a general
settlement
1 July 2004: Russian Tax Ministry announces new tax claim against YUKOS of
$3.4 billion for year 2001
2 July 2004: In order to break the impasse, remove freezing orders, meet
demands of shareholders and commence normal business, YUKOS
reluctantly acknowledges the alleged tax claim and proposes settling it by
selling its 34.5% stake in Russian oil company, Sibneft. These shares are
valued at a significantly larger amount than that owed under the 2000 tax
reassessment. This proposal is again ignored by the authorities
9 July 2004: A further surcharge relating to the alleged taxes of 2000 at RUB
6.8 billion
16 July 2004: YUKOS paid RUB 7 billion up to this date. YUKOS bank
accounts had been frozen but YUKOS still found ways to trade, including
loans to Russian subsidiaries from offshore companies, providing solutions
for salaries and contract payments
20 July 2004: Officials announce plans to sell YUKOS' main production unit,
Yuganskneftegaz
6 August 2004: The Moscow District Court awards YUKOS' request to set
aside the seizure of YNG
6 August 2004: YUKOS writes to the Russian Chief Officer of Justice and
bailiffs seeking permission to sell non-core assets to pay at least some of the
outstanding tax reassessments. This is rejected
13 August 2004: Judgment of the District Court awarding the request to set
aside the seizure of YNG available
2 September 2004: Not content with the impact of the alleged liabilities from
the 2000 tax arrears, the Tax Ministry announces a retrospective tax
assessment for 2001 (taxes, penalties and penalty interest) at RUB 119.9
billion ($4.1 billion) against YUKOS. This represents 130% of the companys
2001 consolidated gross income. YUKOS is ordered to pay within 2 days, but
before this time the Tax Ministry files court proceedings to recover the sums
demanded for these newly announced liabilities
9 September 2004: Payment order for the tax assessment for 2001 (including
penalties) at RUB 79 billion is demanded by the Russian authorities
Early November 2004: YUKOS pays the entire remaining tax reassessment for
2000 and asks for confirmation that the entire bill for 2000 has been paid.
There is no response from the Tax Ministry
28 December 2004: S&P cuts YUKOS ratings to 'D' due to missed interest
payment
30 May 2005: YUKOS paid RUB 360 billion ($13 billion) up to this date
December 2005: By this point, YUKOS has reduced the tax arrears by a
further billion dollars over the course of the year
18 January 2006: YUKOS gets a new #3.5 billion claim for 2004 back tax
19 July 2006: IPO Rosneft (Moscow, London). The floatation was widely
perceived as controversial and as the FT put it, failed to attract any large
institutional players. Commentators agreed that Rosneft solicited companies
with large trading operations with it, or that would otherwise be vulnerable to
Russian government harassment to buy shares, otherwise the IPO would have
been a complete failure. There was a lot of criticism voiced from the likes of
veteran financier George Soros, who called on investors to boycott it on ethical
grounds, and Putin's former economic adviser Andrei Illarionov, who called
the deal illegal and a crime against the Russian people, because none of the
proceeds will go into the state budget
25 July 2006: Rosneft and the Russian Federation vote to reject the Rescue
Plan prepared by YUKOS to demonstrate that the company can continue
27 July 2006: A Russian court postpones a hearing into Rosneft's $8.4 billion
claim against YUKOS until August 10
August 2006: Russian General Prosecutors Office, via its website, announces
criminal investigations into Bruce Misamore, Steven Theede, David Godfrey
and Tim Osborne. No formal notifications of the investigation are received nor
any charges ever filed
December 2006: Tax authorities file proceedings against PwC, accusing them
of helping YUKOS evade taxes
Late March 2007: Moscow court finds against PwC, imposing a fine of
$645,000
May-June 2007: Douglas Miller, PwC Moscow partner responsible for YUKOS
audits, is questioned
15 June 2007: PwC withdraws its YUKOS audits from 1995 to 2004,
apparently due to pressure from Russian authorities