MOSCOW (AFP) - Yukos warned it could declare bankruptcy within months following fresh tax claims that could leave the embattled firm facing an astronomical bill of 17 billion dollars.
Chief Executive Officer Steven Theede told reporters that shareholders would consider the issue during an extraordinary meeting on December 20.
"The board is recommending that the shareholders vote on whether to file for bankruptcy," he said. "That does not preclude management, if it deems it necessary, to file for bankruptcy before December 20."
Although Theede said the board was not advising shareholders how to vote, his tone was less than optimistic.
"Today's situation is not sustainable," he said. "We cannot continue like this for much longer."
"We've done everything to avoid it ... But if we are bankrupt, we are bankrupt (and) we have a legal and a judiciary obligation to file."
The Yukos board decided to call the shareholders meeting a day after Russian tax authorities slapped the bruised firm and its main subsidiary with fresh tax claims of nearly 10 billion dollars in addition to the 7.5 billion dollars in back taxes that have been confirmed by the courts.
The amount was "well in excess of what anyone expected," said Theede. "There is a chance that (the value of Yukos) assets will not cover the value of the tax assessment by the government."
Russian prosecutors have investigated Yukos for months in what many here say is a politically-driven campaign aimed at punishing the political ambitions of its founder and former chief executive Mikhail Khodorkovsky.
Senior government officials, including President Vladimir Putin have repeatedly denied such claims, saying prosecutors were simply investigating a tax cheat.
Throughout the investigation, Yukos has warned several times that it faced the risk of bankruptcy.
Theede said the fate of Yukos -- an investor darling considered to be Russia's most transparent company prior to Khodorkovsky's arrest last year -- rested with the authorities.
"We totally depend on the government of Russia for our future," Theede said. "The cards are with the government."
This week's fresh tax complaints against Yukos include charges against it as a whole as well as its main production subsidiary, Yuganskneftegas.
Yugansk is the crown jewel in the Yukos conglomerate, which Russian authorities have said they would sell in order to settle the outstanding tax bill.
Some analysts contend that authorities aim to dismember Yukos and to transfer ownership of its choice assets into the hands of people who would not oppose Putin, as Khodorkovsky did.
But government officials have repeatedly denied the charges.
Khodorkovsky in October 2003 and jailed pending his trial on fraud and tax evasion charges. On Monday, a Moscow court extended his detention by three months.
"If I were free, it would be much more difficult to carry out the dangerous destruction of such a large company," Khodorkovsky told the court before it extended his preventive detention until February 14, 2005.
11/03/2004 - 13:21 GMT - AFP