The Russian Oil Giant Yukos - When Business and Politics Collide
|
|
ICMR HOME | Case Studies Collection
Case Details:
Case Code : ECON007
Case Length : 18 Pages
Period : 1993 - 2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Oil
Industry : -
Countries : Russia
To download The Russian Oil Giant Yukos - When Business and Politics Collide case study (Case Code:
ECON007) click on the button below, and select the case from the list of available cases:
Price:
For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping &
Handling Charges
» Economics
Case Studies
» Case Studies Collection
» ICMR Home
» Short Cases Studies
» View Detailed Pricing Info
» How To Order This Case
» Business Case Studies
» Case Studies by Area
» Case Studies by Industry
» Case Studies by Company 
Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
Chat with us
Please leave your feedback
|
|
<< Previous
"The company thinks it is humiliating for the Russian legal system. We have
no doubts about a final victory in this war. We consider this whole thing as
a politically motivated affair."
- A Yukos Press Statement Commenting on the Russian Government's Actions
Against the Company, in October 2003.1
"The state surely does not want to destroy the company."
- Vladimir Vladimirovich Putin (Putin), President, Russia, in November
2003.2
"The situation with Yukos, when one day it suddenly turns out that the
leadership of one of Russia's biggest companies has been accused of
stealing, killing, violence, embezzlement and, on top of all that, tax
evasion, looks like a campaign."
- A Senior Official at Kremlin, in July 2003.3
Russia's Richest Man Goes to Jail
|
In October 2003, Mikhail Khodorkovsky (Khodorkovsky),
CEO of Yukos, the largest oil company in Russia, and the country's
richest person (according to Fortune)4,
was arrested and put behind bars. He was allegedly guilty of tax evasion
and fraud to the extent of $1 billion against the Russian state.
The news caused a huge upheaval in the Russian stock market, which took
a severe beating and plunged by 10% on the first trading day after the
arrest. According to reports, this was the heaviest decline since the
Russian financial crisis of August 1998. Khodorkovsky resigned from his
position at Yukos eight days after his arrest. |
|
Yukos had been accused of various malpractices for quite some
time, such as tax evasions and theft of state property (by Khodorkovsky and
other Yukos executives).
|
|
Two of its top executives - Planton Lebedev (CEO of
Group Menatep5 that controlled 61%
stake in Yukos) and Vastly Shakhnovsky (President of Yukos Moscow) were
already behind bars on criminal charges. However, nothing had prepared
company watchers for Khodorkovsky's arrest since he had strong business
and political ties nationally and internationally. Some analysts felt
that the financial crisis created by this development could even
destabilize Russia's political and economic life.
The Russian business community expressed shock at Khodorkovsky's arrest
and said that the State's law enforcement agencies could not be trusted
any more. |
Reportedly, many Russian business elite (called the
oligarchs) feared that they might also meet the same fate as Khodorkovsky, for
having indulged in similar practices during the 1990s.
The Russian Oil Giant Yukos - When Business and Politics Collide
- Next Page>>
|
|
