MOSCOW - The high-tech building that housed Russia`s richest man as he sparred with the Kremlin was spun off in a bankruptcy sale on Friday as its former owner languished in Siberian prison cell.
The 22-storey Moscow headquarters of bankrupt oil major Yukos was snapped up by a mysterious bidder in the last major auction to pay off Yukos` 27.5 billion dollars (20 billion euros) in debts after a government tax fraud onslaught.
The staggering bill and eight-year prison term for former CEO Mikhail Khodorkovsky are widely seen as punishment for the tycoon`s defiance of the rules of Russian business as written by President Vladimir Putin.
With the sale of the building, the destruction of what was one of the world`s largest oil companies is almost complete.
On Friday a few dozen journalists arrived at the deserted office block to watch the sale of a lot of Yukos offices and research facilities -- the sorry remains of the former giant.
The lot was sold for 3.9 billion dollars (2.9 billion euros) to an unknown group called Prana after an epic three-hour bidding war against Kremlin-backed oil major Rosneft.
Representatives of the company refused to speak to the press.
After the auction a spokesman for Yukos` court-appointed bankruptcy administrator, Nikolai Lashkevich, said income from the auctions had covered Yukos` existing debts but that expenses were still growing and the auctions would continue.
Friday`s transaction was the last major sale in a campaign that began with a series of fraud inquiries into Yukos in 2003 and ended with the company`s bankruptcy last year.
The case was seen as part of a wider campaign to take back control energy reserves and crush the ambitions of powerful oligarchs.
As Yukos CEO, Khodorkovsky defied a set of guidelines laid out to business leaders by Putin shortly after his election in 2000 -- guidelines aimed at rebuilding state control lost during the chaotic 1990s.
"The rules were: one, pay your taxes, two, stay out of politics, and three, work within the law going forward. Yukos deliberately ran a truck through all of those," said Chris Weafer, an analyst at investment bank Alfa Bank.
Khodorkovsky riled Putin by buying influence in the legislature, trying to steer the US-Russia energy dialogue, and negotiating to sell a major stake to a US company, which would have transformed Russian foreign policy, Weafer said.
"Khodorkovsky very deliberately broke the rules of game.... If Yukos had not challenged the state, we would have a different structure than we see today."
At the core of the new structure are state-run companies like Rosneft, which was a mid-sized oil producer at the time of Khodokovsky`s arrest, but has grown to the country`s top oil company by snapping up assets as Yukos has lost them.
Rosneft, whose chairman Igor Sechin is also the deputy head of the Kremlin administration, overtook privately-owned Lukoil to become the biggest oil producer in Russia last week after the purchase of several major production assets from Yukos.
In taking advantage of a weak state to buy up cheap assets and squeeze out competitors, Weafer said, "Yukos was the main protagonist in corporate governance abuses of the late 1990s. Having done that, it tried to reinvent itself as a poster child for best corporate governance practices."
"Its destruction perfectly encapsulates the return of the state as the main element of the Russian economy. To that extent, the history of Yukos is the history of Russia."

05/11/2007 14:19 GMT