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Menatep Sues Russia over Yukos Losses

9 February 2005 -- The main owner oil giant Yukos served the Russian government with a claim of $28 billion in damages today.

The firm Menatep accuses the government of illegally expropriating its investment in the oil company, which recently lost its main production unit to the government to cover part of a back-tax bill.

Menatep's managing director, Tim Osborne, said the claim alleges that Russia's government violated an international treaty designed to protect investors' rights. He said an arbitration tribunal may take place in The Hague.

Menatep claims that Yukos was worth $17 billion in October 2003, just before the arrest of the then Yukos CEO Mikhail Khodorkovskii for fraud and tax evasion.

Yukos has been driven toward bankruptcy by a $27.5 billion tax claim by the state, while Khodorkovskii is on trial in what he claims is a politically motivated case.