Russia sells the heart of Yukos

Russia has sold the heart of the Yukos oil empire in an auction reminiscent of the country’s notorious privatisations of the 1990s, analysts said, as the former CEO of the company offered bitter season’s greetings to the Kremlin from behind bars.

“The authorities have given themselves a wonderful Christmas present,” said Mikhail Khodorkovsky, the jailed founder of the business that had been considered the most transparent of all Russian companies.

A day after an auction that saw 11% of Russia’s oil output handed to a previously unheard-of company registered in a provincial western city, Russian stocks fell across the board yesterday, with Moscow’s RTS exchange closing down 1.2% for the day.

Yukos – once the bluest of the Russian blue chips – plunged deeper into junk stock status, falling nearly 26% on the RTS to $0.57. At their highest, Yukos shares traded at $16.

Even after the sale of the giant Yuganskneftegaz unit, the company still must come up with €13.4bn to pay crippling back-tax bills, meaning the carve-up of the company’s assets is likely to continue.

In a statement on his website, Khodorkovsky, once Russia’s wealthiest man, pulled no punches in describing what he said was the Kremlin-orchestrated legal assault on a company that he built from a suspect auction about a decade ago.

“They have destroyed the most effective oil company in Russia,” said Khodorkovsky, who has been behind bars since his arrest on tax and fraud charges more than a year ago.

The auction winner – BaikalFinansGroup – is an unknown company, whose registered address is a building in the city of Tver that houses a food store, café and a mobile phone shop.

BaikalFinansGroup joined the bidding on Friday, one day after a US bankruptcy court issued a 10-day injunction against the sale.

Yukos lawyers had turned to US courts as a last resort, seeking Chapter 11 bankruptcy protection in an effort to stave off the sale of Yuganskneftegaz, which pumps nearly 60% of its oil.

On Monday, Yukos filed a notice with the Houston bankruptcy court that any person or entity who participated in the auction violated the orders protecting the company’s assets and could cause damage in excess of €14.9bn if the sale goes through.

“Yukos will pursue one or more damage recovery actions in forums Yukos believes appropriate to redress such damage,” the company said in its filing.