So, Yukos is bankrupted by the Russian Government chasing unpaid tax bills. The major oil producing subsidiary is sold off to a shell comapny, Baikal Finance, for an absurdly low sum. As I predicted a few days ago, this shell would be sold on to some other company creating a few more hard working billionaires overnight. Just three days later I am proved correct. For as the NY Times reports today, Baikal has been bought by Rosneft, a State owned oil company that is itself in the process of merging with Gazprom, another State controlled company.

So, who benefits from all this? The price paid by Rosneft has not been revealed, and probably will not be. It is a State company after all, and does not have to reveal its accounts in the same way a private company would. There has undoubtedly been a turn on the transaction for the lucky owners of Baikal…..and no one knows who they are but we might assume that they are closely connected with the administration. Gosh, lucky people, buy something half price and then sell a few days later.
There is also one more level of elegance to this sordid tale. The court case in Texas, claiming that the entire auction process should not have been run, can now go nowhere. For even if the Yukos management and shareholders win, they will be pursuing that empty shell, Baikal, not Rosneft, as they have bought the stock legally, not in a rigged auction.

Bravo, Bravo Maestro, to whoever engineered this one. The odd billion or two raked off the State plus leaving the legal system in the dust. You’ve acheived your aims, pity that it’s at the cost of all the investment that will not now come to Russia, at the cost of the living standards of your fellow citizens who will be stuck in penury for further decades.