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| Details |
| Case Code: CLIBE026 |
| Case Length: 4 pages |
| Period: -- |
| Pub Date: 2005 |
| Teaching Note: Not Available |
| Subject :Business Environment |
| Price:Rs.50 |
| Organization :-- |
| Industry :-- |
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Russian Oil Industry-Tiff between the Government & Yukos * |
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| The caselet explains the formation of Yukos, an oil company, by the Russian government and the scuffle that took place between the oil giant and the government. |
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Issues: |
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- Drop in consumption of domestic oil in Russia.
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- Establishment of vertically integrated companies (VICs) in Russia.
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- Formation of Russia's first completely privatized company.
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- Reasons for decline of business confidence in Russia.
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| Introduction |
In October 2003, Mikhail Khodorkovsky (Khodorkovsky), CEO of Yukos, the largest oil company in Russia, and the country's richest person (according to Fortune), was arrested and put behind bars on the charges of tax evasion and fraud to the extent of $1 billion against the Russian state.
Oil has been Russian economy's primary growth driver. In 1960s, the then Soviet Union (USSR) had replaced Venezuela as the world's second largest oil producer. However, low productivity in the industrial and agricultural sectors led the economy down the path of stagnation.
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| Questions |
1. Comment on the way Vladimir Putin tackled the case of the oil giant Yukos, and in particular, its chairman Khodorkovsky.
2.Do you support the comments made by observers that the drive against Yukos and Khodorkovsky has hurt business confidence in Russia and has already taken the shine off Russia's booming economy? Justify your answer. |
Keywords |
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Yukos, tax evasion, vertically integrated companies (VICs), Lukoil, Surgutneftegas, Rosneft, shareholders, tax evasions
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US
$16) per copy.
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