RussNeft Investigated for Tax Evasion

Today the Financial Times is reporting that yet another private oil company is facing a government investigation into alleged “large-scale tax evasion” – which analysts believe may be related to the state’s ongoing efforts to consolidate further control of the oil and gas sector. gutseriev.jpg Mikhail Gutseriev, former president of SlavNeft, former Duma member, and current president of RussNeft While apparently some Russian media have reported that RussNeft President Mikhail Gutseriev had been detained in relation to this probe, a statement on the company’s website refutes that claim:

Actually at present Investigative Committee of the Ministry of Internal Affairs is working over the said criminal cases. In particular, some documents, essential for the investigation, were seized from the Company’s office and some senior managers of the Company were interrogated as witnesses. However the information spread by some media about the alleged detainment of the president of the Company is untrue and impairs the credit of the Company’s name. The Company’s management render all assistance to the investigation, upholding the justice of their position, which was earlier straightforwardly stated in mass media. OAO Oil and Gas Company “RussNeft “express their confidence that Investigative Committee of the Ministry of Internal Affairs will scrupulously and objectively study the case arisen in connection with production activity of the Company’s subsidiaries. Besides, “RussNeft” reserve the right for remedial action in case of publication of patently false statements prejudicing their business standing.

RussNeft is Russia’s fastest-growing privately held oil company, and has spent recent years acquiring and vertically integrating production companies at a breakneck pace, including assets from Yukos and TNK-BP. It is not yet clear whether RussNeft is being viewed as a competitive threat to Rosneft or Gazprom (which is the usual motivation for these kinds of investigations), and in general it is believed that the company’s president has very positive relations with the government.