THE HAGUE’S arbitration court yesterday ordered Russia to pay a group of Yukos shareholders $50.02bn (£29.4bn) in compensation for deliberately bankrupting the oil company, at a time when relations between Russia and the West were already on a knife edge.
The arbitration panel in the Netherlands awarded shareholders in the GML Group, a former Yukos holding company that brought the case, just under half of their $114bn claim.
“Yukos was the object of a series of politically motivated attacks by the Russian authorities that eventually led to its destruction,” the court said. “The primary objective of the Russian Federation was not to collect taxes but rather to bankrupt Yukos and appropriate its valuable assets.”
Yukos, which was once controlled by formerly jailed oligarch Mikhail Khodorkovsky, had its assets were seized by the Kremlin a decade ago.
They now form part of state-owned oil company Rosneft, which was recently the target of US sanctions due to worsening tensions over Russia’s actions in Ukraine.
The payout will be shared between the shareholders. The biggest beneficiary will be Russian-born Leonid Nevzlin, a business partner now based in Israel who has a stake of around 70 per cent.
Russia’s finance ministry said it planned to appeal against the ruling, which it called “flawed” and “politically biased”.
Pro-Russian separatists were blamed for shooting down a Malaysia Airlines aircraft over eastern Ukraine earlier this month, triggering sanctions from the West against certain Russian companies and individuals.
Khodorkovsky acquired Yukos in a state auction in 1995 for the knockdown price of $350m, as part of Russia’s controversial privatisation of state assets. It went on to become Russia’s second largest oil company.
But Khodorkovsky was jailed in 2005 for eight years on charges of tax evasion, fraud and embezzlement, which some believe was due to his open criticism of president Vladimir Putin.