UPDATE - Gerashchenko, Halliburton man to join YUKOS board
Thursday April 29, 2004 7:33 am ET
(Adds YUKOS confirmation, Gerashchenko comments)###
MOSCOW, April 29 (Reuters) - Embattled Russian oil firm YUKOS announced on Thursday that former central bank head Viktor Gerashchenko and Edgar Ortiz, a top executive of U.S. oilfield services firm Halliburton, are to become directors in June.
Company sources said Gerashchenko was also likely to be elected chairman at the annual shareholders meeting on June 24.
The move comes as the company fights to survive an onslaught by the Russian authorities which has seen the arrest of its key owners and a claim for $3.5 billion in back taxes.
"I have been always trying...to find optimal solutions for parties in conflict," Gerashchenko told the Russian television NTV after the board met in London late on Wednesday to discuss the agenda for the annual meeting.
"I always believed that the state should play a regulative role in the economy...But of course not through dictatorship," he added.
Gerashchenko's appointment is the latest twist in a complex saga which began with the arrest of former Chief Executive and key shareholder Mikhail Khodorkovsky and led to the company announcing earlier this week it may be forced to default on some its debts.
Ortiz, adviser to the head of the world's second biggest oilfield services firm, has long been president and chief executive of Halliburton's biggest operating unit, Energy Services Group.
The two new directors will replace Khodorkovsky, in jail since October and awaiting trial on charges of fraud and tax evasion, and current YUKOS Chairman and Chief Executive Simon Kukes, who will leave the board but stay on as chief executive.
The arrest of Khodorkovsky was widely seen as a Kremlin-inspired move to punish the billionaire for political activities which included frustrating attempts by the government to tax the oil industry more heavily.
Some analysts have said the appointment of Gerashchenko may help the firm in its row with the Kremlin, although others said he was just a token figure and had little chance of settling the conflict quickly.
"The practice of not having YUKOS executives on the board is another example of the company's commitment to internationally recognised procedures of good corporate governance," said Kukes.
The meeting confirmed for re-election another nine candidates, including a director at GM Investment Francois Buclez, and the treasurer at the world's biggest oilfield services firm Schlumberger, Michel Soublin.
YUKOS, which is in the throes of demerging from its estranged smaller partner Sibneft, said Sibneft's representatives did not offer candidates for appointment to the board.
YUKOS, which is also fighting a $3.5 billion demand for back taxes for 2000, said it would not pay an additional dividend for 2003 having already approved a record $2-billion payout for the first nine months of last year.