A wrench in Rosneft's IPO
Russian oil company Rosneft
KAI RYSSDAL: Given the state of the world's stock markets today —lower, by a lot — it probably wasn't the most auspicious time for an initial public offering. The state-owned Russian oil giant Rosneft was set to go public tomorrow in Moscow and on the London Stock Exchange. But today another Russian company threw a big wrench into the works. From London, Marketplace's Stephen Beard has that story.
STEPHEN BEARD: Russia's state-owned Rosneft oil company wants to sell around 10 percent of its shares to raise about $11 billion. This was always going to be controversial. The company's most valuable asset — its main production unit — was acquired on the cheap from YUKOS.
The Kremlin forced the sale and broke up much of YUKOS, claiming that its politicially active founder was involved in tax evasion and fraud. What's left of YUKOS remains in private hands. And that company has now mounted a rearguard legal action. It's asked a British court to stop Rosneft's listing on the London Stock Exchange.
Lawyer Robert Amsterdam represents the former YUKOS boss. He's not involved in the latest legal moves but he says Rosneft's IPO is legally indefensible:
ROBERT AMSTERDAM: These are stolen goods. And they will be stolen tomorrow and the day after tomorrow until the people who own YUKOS have been properly compensated for the theft.
Unofficial dealing in Rosneft shares was due to begin tomorrow morning. That may not happen now says Justin Urquart-Stewart of Seven Investment:
JUSTIN URQUART-STEWART: When you've got the threat of legal action hanging over potential trading, it certainly is a significant spanner which I think could act as, certainly, a disincentive to trade.
But Rosneft has the direct backing of the Kremlin. And President Putin will want this embarrassment out of the way before he hosts this weekend's G8 summit. Rosneft will move fast to have YUKOS' legal challenge lifted.
In London, I'm Stephen Beard for Marketplace.