Russia moves against oil firm billionaire Yevtushenkov with share seizure

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Russia moves against oil firm billionaire Yevtushenkov with share seizure

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A Moscow court has seized the shares of an oil company mostly owned by Russian conglomerate Sistema.

Its boss, billionaire oligarch Vladimir Yevtushenkov, is under house arrest accused of money laundering during the acquisition of the oil firm – Bashneft – from local authorities in the Urals region seven years ago.

Yevtushenkov has always had good relations with President Vladimir Putin, but the share seizure deepened investors’ fears the Kremlin is stepping up its campaign to reclaim former state assets, like Bashneft, which is Russia’s sixth largest oil producer.

The case has drawn comparisons with Yukos, the oil giant taken over by the state when its chief executive Mikhail Khodorkovsky was jailed for fraud and tax evasion after falling out with Putin.

The Russian prosecutor general’s office, said it had uncovered “significant violations” of the law and was acting to end the “illegal possession” of Bashneft and restore it to federal ownership.

It said the Moscow arbitration court had granted its request to seize the shares as an interim measure and the court said it would hold a hearing on the lawsuit on October 9.

Shares in Moscow, including Sistema and Bashneft, fell on the news while the rouble slumped to new lows.

Even Russia’s Economy Minister Alexei Ulyukayev has said Yevtushenkov’s arrest is damaging the country’s business and investment climate.

Sergei Petrov, an opposition deputy, told Reuters this week: “They (officials) are telling themselves, to ease their conscience, that they are doing a high-minded thing by returning it to state ownership. The channel is already known, the method has been tested … as it was last time with Yukos.”

Sistema has denied the accusations against Yevtushenkov, though it and Bashneft declined comment on the share seizure.

with Reuters