Yukos CEO says subsidiary sale ‘farcical’

LONDON — The sale of a Yukos subsidiary to a previously unknown company is a farce that contradicts Russia’s moves to reform business and legal practices, the chief executive of the Russian oil giant said Monday.

The Yuganskneftegaz subsidiary was sold to the BaikalFinansGroup at an auction in Russia on Sunday, following months of battling by Yukos against a $28 billion back-taxes claim by the Russian government.

“The auction was as farcical as the process being used by the Russians’ false tax claims against Yukos,” CEO Steven Theede told reporters in London. “It must be clear who the company is, and how this happened.”

Theede said the $9.3 billion sale price was “half what should have been paid.”

He said BaikalFinansGroup was just two days old, and he had no idea who is behind it.

“It’s a move backward. We have been the most transparent company in Russia. To be sold to an unknown company is a move that is contrary to the overall reform initiatives in Russia,” Theede said.

Theede said Yukos would continue operating the unit, which produces about 1 million barrels of oil a day, for at least the next few weeks while the process of restructuring presumably begins.

But Theede said Yukos continues to hemorrhage money and has been unable to invest the needed $340 million a month for the upkeep of its oil fields, instead spending about $120 million a month.