Lawyers volte-face. The lost case on collecting 99.375 billion rubles. The website Prigovor.ru reminds its readers of what happened on June 18, 2004.
On this day 18 years ago, on June 18, 2004, lawyers of the oil empire of the tax swindler Mikhail Khodorkovsky* took desperate moves with regard to the court case on collecting from the oil company Yukos 99.375 billion rubles which “the most transparent” oil company “had forgotten” to pay to the budget of the country in 2000.
In the spring of 2004, specialists of the Tax Service of Russia carried out a certain number of inspections. Based on the results of these moves, a report from April 14, 2004, was drawn up in which fact of systematic tax evasion were asserted. A demand was laid to Yukos on settling tax arrears, including fees and penalties, to the total amount of 99 billion 375 million 538 thousand 234 rubles. Yukos didn’t want to pay anything, having declared itself “a conscientious taxpayer” “fulfilling tax responsibilities in full volume”. The case came to trial, and Yukos lawyers lost it – on May 26, 2004, the court sustained the claim of the tax services on this matter.
FATAL LINE OF DEFENSE
The failure of Yukos lawyers, so it seems, was connected with the line of defense of the company. According to it, all shell-firms engaged by the leadership of the oil concern in gray schemes on the territories with preferential tax treatment (Mordovia, Kalmykia, Evenkia and so on) had nothing to do with the “transparent” company of Khodorkovsky, and all problems with taxes was their sphere of responsibility.
However, the problem was that specialists of the Tax Service during the inspection collected materials which directly pointed out that dubious legal persons were dependent on Yukos, were connected with it, and were part of the so-called “corporate perimeter” of the parent company. The reverse side of Yukos “finance transparency” widely reported of in the whole world, eventually, turned out to be a show-case of tax machinations. A mass of documental proofs was for the court a lot more significate than laud statements of the trickster in the press.
(See also the article “On this day, Yukos was dissociating itself from shell-firms”).
A MOVE OF LAWYERS DESPERATION A move of lawyers’ desperation
Having lost the litigation in court, the defense turned to although not prohibited, but still extravagant methods of money saving, what Yukos had dragged away from the state. So, on June 18, 2004, Yukos lawyers asked for recusal of the whole set of the appellation instance of the Moscow Arbitration that were considering the case of recovering from the company 99.375 billion rubles. “The defense of the respondent has doubts about the impartiality of the court”, said Yukos lawyers.
The court evaluated in its own way this “move of desperation” and dismissed the stated recusal “of all judges” on the case of the recovery from Yukos the tax arrears. In several days, on June 29, 2004, the ruling of the Moscow Arbitration Court on recovery from Yukos 99 billion rubles came into force.
YUKOS STOLE A DEFENSE BUDGET OF THE COUNTRY
“As to experts, they started to reflect on how and with what means Yukos would pay the price of the tax machinations of the swindler Khodorkovsky. It was a very urgent question – the exposed schemes of tax affairs for 2000, were found also for other accounting reference periods. In the end of the day, the tax claims against Khodorkovsky’s criminal oil group, turned out to be one and a half times bigger than the defense budget of Russia for 2005 – nearly $25.79 billion”, notes the website Prigovor.ru.
(See also the previous article “On this day, Western creditors stripped Yukos of $482 million”. The High Court of London sustained the claim of the Western creditor banks to the amount of 482 million dollars. The Website Prigovor.ru reminds its readers of what happened on July 17, 2005).
*On May 20, 2022, the Russian Ministry of Justice included M.B. Khodorkovsky in the list of physical persons executing functions of a foreign agent.