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Yukos Tax Deadline Passes

8 July 2004 -- Russia's Yukos oil company is awaiting its fate after a midnight deadline expired for the payment of $3.4 billion in back taxes.

"We have no fresh news. We are waiting," Reuters quoted Yukos spokesman Aleksandr Shadrin as saying this morning.

Mikhail Khodorkovskii, the jailed former CEO of the oil company, has asked Yukos's board of directors to use his stock and that of other top shareholders to pay the tax bill.

Lawyer Anton Drel said last night that Khodorkovskii, who still holds a 44 percent stake in the company, is willing to give up his shares to pay the government's tax demand, which so far totals nearly $7 billion for the years 2000 and 2001.

As the deadline for the payment of $3.4 billion of that total approached, Drel said yesterday that "Mr. Khodorkovskii has in fact asked the board of directors of Yukos to use the stock of top company shareholders to pay the government tax bill in order to prevent the company from bankruptcy."

In Moscow the same day, Hugo Erikssen, the head of Yukos's international information department, said that "Yukos has slightly more than $1 billion in cash in its accounts, but the accounts and the assets of Yukos have been frozen. So unless the government gives us more time to pay back what we owe the government, we will be, technically speaking, insolvent."

Earlier yesterday, Russian Justice Ministry officials -- backed by paramilitary police -- searched the company's depository for a register of the firm's assets.

The same day, the Organization for Economic Cooperation and Development (OECD) criticized the government's operations against Yukos, accusing the Kremlin of "selective law enforcement."