Comments on the Final Yukos Auctions

As many of you are aware, tomorrow the bankruptcy liquidator will be holding the final auctions of Yukos assets, and, as we all expected, Rosneft is raking in the lion’s share of oil production assets at vast discounts (just 7.4% above the opening price). Whereas in the past, the Kremlin undertook great efforts to make these thefts look legal (for example the use of shell companies in the Yuganskneftegaz auctions), it seems they have largely given up any such charade. They even went so far as to have their anti-monopoly authority to cancel the acquisition of assets by Promregion Holding, for its alleged links to LUKoil (yes, incredibly such an authority exists in Russia, though given that Gazprom has a monopoly by law, I would imagine they aren’t very busy).

Russian Economy

Thanks to companies like BP and Shell, Russian show trials and the gulag have their first corporate sponsors

This is the ending we have been expecting for some time. From the beginning of the attack on Yukos and the unlawful imprisonment of my client, to the final rigged auction, the process has been riddled with procedural and legal violations which have thoroughly discredited any claim of legitimacy to the charges by the State. The media is wont to say that the conclusion of the Yukos affair marks the end of an era of vast personal enrichment – but that’s not true. Now it is the siloviki inside the Kremlin lining their pockets under the guise of public trust. I challenge the government to show where the auction money is really going. The Kremlin would like you to believe that Yukos was the Enron of Russia – but that’s not true, and there’s no plausible explanation how in 2004 the company should owe a preposterous eight rubles tax for every one ruble of revenue, or how the chief bankruptcy liquidator gets nominated for the board of Rosneft next to the president’s other friends. The most shameful feature of the Yukos auctions has been Russia’s successful arm-twisting of energy multinationals to provide a service of ‘reputation laundering’ in the fencing of these stolen goods. But let it be known to firms such as ENI, Enel, BP, and Royal Dutch Shell who have bought or expressed interest in bidding on Yukos assets, that the number of accomplices does not lessen the gravity of the crime. Aside from making a mockery out of their pledges to corporate social responsibility, their shameful attempts to curry favor with a corrupt regime at the cost of human rights will ultimately fail, and within the year these companies will again likely face harassment from the authorities.