Yukos to face fraud allegations

Ailing Russian oil company Yukos and its former financial head will have to defend themselves in a fraud lawsuit, a US judge has ruled.

Yukos and its former chief financial officer Bruce Kisamore will be asked to respond to allegations of mis-stating the company’s tax risk to investors.

Yukos and Mr Kisamore have so far made no response to the decision by Judge William Pauley.

However, Mr Pauley dismissed other allegations for lack of jurisdiction.

In 2003, Russian authorities arrested Yukos’ former president Mikhail Khodorkovsky and seized his 44% equity stake in the company.

Khodorkovsky was jailed after being found guilty of fraud, embezzlement and evasion of personal income taxes. He is now serving an eight-year sentence in a penal colony in eastern Siberia.

Yukos was also accused by the Russian Ministry of Taxation of tax evasion between 2001 and 2003, and for underpaying its taxes by more than $27.5bn.

The bankruptcy hearing of Yukos began earlier in March in Moscow.

The case was brought by 14 foreign banks that were owed $482m (£276m) by Yukos. They have since sold this debt to state oil firm Rosneft.