This is a sad day for Russia and its people.

Today's announcement is both stunning and expected. Stunning because it is such a bold demonstration of the contempt the government has for the rule of law. Expected because given the way this case has developed the outcome was determined long ago.

YUKOS has consistently maintained that there are fundamental flaws with the government's proposed actions. Among them:


The sale is clearly illegal under Russian law, which states that non-core assets are to be disposed of first in tax settlement cases. Yuganskneftegas is the heart of Yukos, and its sale will lead to the destruction of the most efficient Russian oil company, and the one that has attracted the most western investment. The President, the Russian administration, and the Russian government, by ignoring the illegalities being perpetrated are in effect condoning the illegalities.
This expropriation makes a mockery of the protection of private property so eloquently championed by the President earlier in the week. The sale is made possible by the government's creation of a completely artificial cash crisis brought on by the freeze of assets and bank accounts, and through preposterous and absurd tax claims in excess of the company's revenues.
The starting bid price bears no resemblance to the true value of Yuganskneftegas, one of the world's premier oil production companies, and amounts to theft of YUKOS assets. YUKOS has fueled the rebirth of the Russian oil industry since 1999, largely through its development of Yuganskneftgas. The sale of Yuganskneftegas at a low price increases the probability that the Russian government will then proceed to steal more of YUKOS assets through artificial sales to meet artificial tax bills.
Since 1991, Russia has been on a slow but steady path towards building the foundations of a modern market economy. Today's decision marks a setback that the world community, and international investors, must condemn.

What we are witnessing is, simply put, a government organized theft to settle a political score.