Wednesday, July 19, 2006

Amsterdam on the Rosneft IPO

In the UK Times, Derek Brower interviews Robert Amsterdam, lawyer of Mikhail Khodorkovsky, the Russian businessman who was recently sentenced to 9 years' imprisonment in a labour camp for defying the will of the Kremlin. Rosneft, the giant Russian oil and gas company, is launching its $11 billion IPO (initial public offering) on the London stock exchange this week, and Amsterdam has some unambiguous words of warning:
The Kremlin is attempting, according to Amsterdam, to “whitewash Khodorkovsky’s history, his phoney criminal prosecution and the history of Yukos”. The IPO is nothing less than “state theft” and anyone buying stock will be colluding in a climate of impunity that allows the Kremlin to operate with little regard for international law.

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The morality argument might not wash with hard-nosed investors, but the “dangerous precedent” of this IPO is a threat to any other investor in Russia, claims Amsterdam. By prosecuting the Yukos case, which was based on retroactive tax claims against the company, and proceeding with the flotation, Amsterdam says that the Kremlin has “taken away any security of property” in the country.
(hat tip: Jeremy Putley)

Update:

U.K. COURT GIVES GREEN LIGHT TO ROSNEFT.

A London High Court judge refused on July 18 to grant a judicial review or injunction on behalf of the embattled Russian oil company Yukos regarding the initial public offering (IPO) of Rosneft on the London Stock Exchange, Britain's "Financial Times" reported on July 19 (see "Russia: Rosneft's Successful Gamble," rferl.org, July 13, 2006). The decision enabled Rosneft shares to begin unconditional trading in London as well as Moscow on July 19. Yukos challenged the IPO on the grounds that 70 percent of Rosneft's value came from the forced sale of Yukos' core assets and that the flotation is tantamount to money laundering under U.K. law, RIA Novosti reported. PM

(RFE/RL Newsline, July 19 2006)
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