RusEnergy

MOSCOW, May 23 (RIA Novosti) - A Moscow arbitration appeals court has thrown out a motion by bankrupt oil company Yukos [RTS: YUKO] to overturn the 2004 sale of its then core production unit, Yuganskneftegaz, a RIA Novosti correspondent reported from the courtroom Wednesday. A 76.79% stake in Yuganskneftegaz was sold by Russia's federal property fund on December 19, 2004, in lieu of Yukos' tax arrears for 2000 and 2001. A few days later, state-controlled crude producer Rosneft bought the asset from the winner of the auction, a previously unknown company called Baikal Finance Group. The group was widely believed to be a vehicle set up to enable Rosneft to cheaply acquire the stake. Yukos first challenged the auction in May 2005. The company claimed the sale of Yuganskneftegaz was conducted in violation of Russian and international law. Yukos lawyers also claimed the federal property fund had deliberately underestimated the initial value of the asset. The defendants in the case were the federal property fund, the Russian Finance Ministry, and several companies that participated in the auction. But a Moscow arbitration court rejected the lawsuit on February 16, after which Yukos challenged the ruling in the arbitration appeals court. The appeals court also rejected Yukos's compensation claim against the defendants, to the sum of 388.3 billion rubles (about $15 billion), for losses due to the sale of its core production unit. Yukos was declared bankrupt on August 1, 2006 following three years of litigation with authorities over the tax arrears.