Deutsche attacks Yukos case

German investment bank Deutsche Bank has challenged the right of Yukos to claim bankruptcy protection in the US.

In a court filing on Tuesday, it said the Russian oil giant has few Texas ties beyond bank accounts and a Texas-based finance chief. Deutsche Bank claimed Yukos had artificially manufactured a legal case to stop the sale of its main asset. It had wanted to help fund Gazprom's plans for a $10bn (£5.18bn) bid for Yukos unit Yuganskneftegas.

Deutsche Bank would have earned large fees from the deal, which could not be carried out because US chapter 11 bankruptcy rules made the Kremlin's auction of Yuganskneftegas on 19 December illegal under US law.

But the US bankruptcy court judge in Texas granted Yukos an injunction that barred Gazprom and its lenders from taking part. Yuganskneftegas will ultimately end up with Gazprom. The winning bidder at the auction was a previously unknown firm, Baikal Finance Group, which was snapped up days later by Rosneft, a Russian oil firm that is in the process of merging with Gazprom. The effect of these transactions is to renationalise Yuganskneftegas. Deutsche Bank contends Yukos filed for bankruptcy earlier this month in Texas in a desperate and unsuccessful bid to stave off the 19 December auction of its top unit by the Russian government, which was in a tax dispute with Yukos.

"This blatant attempt to artificially manufacture a basis for jurisdiction constitutes cause to dismiss this case," Deutsche Bank said in its court filing. Mike Lake, a spokesman for Yukos' lawyers, said on Tuesday that the company stands by its legal action. Yukos is confident of its right to US bankruptcy protection, and "we are prepared to be back in court defending that position again," he said. Yukos has said it intends to seek $20bn in damages from the buyer of Yuganskneftegas once the sale finally goes through. In its filing, Deutsche Bank said Houston was "a jurisdiction in which Yukos owns no real or personal property and conducts no business operations."

It also said the US bankruptcy court should not become involved in "a tax dispute between the Federation and one of its corporate citizens". It suggested the European Court or an international arbitration tribunal were more appropriate jurisdictions for the legal fight between Russia and Yukos. The next hearing in the bankruptcy is expected on 6 January. Analysts believe the tax dispute between the Russian government and Yukos is partly driven by Russian president Vladimir Putin's hostility hostility to the political ambitions of ex-Yukos boss Mikhail Khordokovsky. Mr Khodorkovsky is in jail, and on trial for fraud and tax evasion.
