Khodorkovsky divests from Yukos amid staff cuts

Jan 12, 2005 01:00 AM

The jailed founder of the partly re-nationalized Yukos oil giant, Mikhail Khodorkovsky, has reportedly divested himself of the collapsed company, which confirmed that it was firing more than half of its staff.
Khodorkovsky transferred a 61 % stake in a holding company that controls most of Yukos to his second in command Leonid Nevzlin. Nevzlin is facing his own charges in Russia and now lives in self-imposed exile in Israel.

Khodorkovsky's decision reportedly came after the government on December 19 took control of Yukos's main production unit Yuganskneftegaz in a controversial auction that saw it sold off at a fraction of the price at which it had been valued. Yukos is being slowly dismantled to pay a crushing tax bill that now stands at nearly 15 times the company's market capitalization.
Khodorkovsky had built Yukos into a Western investor darling for its transparent business practices. It also threatened to become a powerful domestic force by exporting the largest amount of Russian oil while its leader delved into politics and open opposition to President Vladimir Putin.

Yukos now stands in tatters, with the government controlling most oil exports and its remaining units lining up for the auction block to pay off the outstanding tax bill. The company has been forced to slash staff as a result and Yukos officials said that its imposing headquarters in Moscow -- a massive steel and glass monolith that once symbolized Khodorkovsky's power and drive -- is now growing empty.
"The leadership of Yukos has decided to 'optimise' its central command staff, firing more than half of its employees," Yevgeny Fokin told. This plan concerns Moscow headquarters -- which staffs 1,400 people -- along with Yukos's exploration and production as well as its refining and marketing divisions. The layoffs came into effect on New Year's eve and employees have two months to find themselves a new job.

Analysts had mixed views as to why Khodorkovsky decided to break off all ties with a company that once made him Russia's richest man while still in his 30s. At 41 he faces at least 10 years in jail on a series of fraud and embezzlement charges unrelated to Yukos's own tax problems.
He was arrested at a point when Yukos was about to merge with a smaller company to create a giant that in turn planned to partner with a US major and thus create a global super-conglomerate not yet seen in the world.

The US linkup would have also made him into a powerful politician who would have effective immunity from Kremlin prosecution. Analysts however said that Khodorkovsky's move to cut ties with his company seemed to be a personal decision rather than a political one or a bid to somehow affect his own trial.
"We do not expect the transfer of shares from Khodorkovsky (whose political agenda may have been the key reason for his arrest and the attacks on Yukos) to lead to any major changes in the Yukos case," the United Financial Group said in a research note.

Source: AFP
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