Moscow arbitration court holds hearing on back tax claim against Yukos

MOSCOW (AP) _ A Moscow court rejected two appeals by the Yukos oil company Friday to postpone hearings on charges it owes $3.4 billion in back taxes. <br/><br/>The appeals came a day after Russian President

Friday, June 18th 2004, 6:01 am

By: News On 6

MOSCOW (AP) _ A Moscow court rejected two appeals by the Yukos oil company Friday to postpone hearings on charges it owes $3.4 billion in back taxes.

The appeals came a day after Russian President Vladimir Putin said his government was not out to ruin the company and that the tax claims were a matter for the courts. The remarks sent Yukos share prices climbing.

On May 26, the Moscow Arbitration Court ordered Yukos to pay the taxes but trimmed $6.8 million from the original amount.

In addition to the Yukos appeals, the Arbitration Court was considering a Tax Ministry appeal to overturn the previous court decision to cut the original tax claim.

Yukos lost a procedural appeal Friday to suspend hearings on the Tax Ministry claim on the grounds that it should have been heard in a separate court session.

Company lawyers then lodged another appeal to postpone hearings on the court's May 26 decision to force Yukos to pay the Tax Ministry bill until June 28. The judges turned down that appeal, as well.

The Tax Ministry accuses Yukos of having used onshore tax havens to minimize its tax liability in 2000. Yukos, in turn, has said that any tax schemes it used were legal, and that many of the tax liabilities apply to companies that were unrelated to Yukos.

Yukos managers have said the company does not have the assets to pay the taxes. They have told the government that Yukos could pay the claim if given time and a chance to sell some of its assets that have been frozen in the course of the yearlong investigation.

Menatep Holding, an investment company that owns 60 percent of Yukos, has said it would be willing to decrease its stake if the move would ensure the company's survival.

Putin has portrayed the investigation as part of Russia's effort to tackle economic crime and corruption. Yet the court cases have raised fears in Russia and abroad that the government may be motivated by a desire to reclaim some of the natural resources and enterprises sold off in widely criticized 1990s privatizations, or at least ensure they are run by Kremlin-friendly executives.