Yukos launches court bid to halt Rosneft IPO

LONDON - The stricken Russian oil company Yukos took to Britain’s High Court on Monday in a bid to stop the London stock market flotation of Russian state-owned energy giant Rosneft.

By (AFP)

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Published: Mon 17 Jul 2006, 10:45 PM

Last updated: Sat 4 Apr 2015, 3:11 PM

Rosneft aims to raise 10.4 billion dollars from a part flotation in London and Moscow this week, valuing it at 79.8 billion dollars, but the move is mired in controversy over how Rosneft bought part of Yukos, a now-dismantled Russian oil empire.

Clare Montgomery, acting for Yukos, told the court on Monday that the London Stock Exchange and Britain’s Financial Services Authority would be breaking the law against dealing in “dirty money” if they allowed Rosneft shares to float on Wednesday.

Yukos accuses the Russian government of stealing its prized main oil-producing subsidiary, Yuganskneftegaz, in 2004 and selling it to Rosneft in 2004 at what the market saw as a knockdown price.

Mongomery said that she strongly contests legal advice, which was given to the FSA and LSE, that Yukos’s objections were ”non-justiciable” -- or not open to legal challenge -- in English courts because the courts had no power to interfere in the actions of a foreign state.

Instead, Montgomery urged the presiding judge, Justice William Charles, to grant Yukos permission to seek a judicial review of decisions by the FSA and the LSE to admit the shares, plus an injunction blocking the flotation pending a full hearing.

Montgomery added that the Russian Government had put Yuganskneftegaz shares up for auction at half the price they had been valued at.

Mark Howard, acting for Rosneft, claimed it was a “nonsense” to say there is any suspicion over the acquisition of the shares.

The FSA and the LSE argue that because the shares were acquired by an act of state they would not be doing anything wrong in allowing the float to go ahead.

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