The Russian auction commission has declared the Sunday's auction for a 76.79 percent stake in Yukos' core production subsidiary Yuganskneftegaz to be valid, the Interfax News Agency reported.  

At the auction an unknown firm Baikal Finance Group was announced by the auction commission the winner of Yukos' biggest production unit Yuganskneftegaz only 10 minutes after the auction started at 3:59 PM Moscow time (1259GMT), beating another bidder, the sate-run gas monopoly Gazprom.

Tver's Baikal Finance Group purchased the stake for 260.753 billion rubles (about US$9.35 billion), with the starting price at 246.75 billion rubles (about US$8.63 billion), less than half of the Yuganskneftegaz company's true estimated value. It produces 60 percent of Yukos' oil output.

Auction commission representatives said they do not know who stands behind Baikal Finance Group. "It (the company) has not been under the Russian Federal Property Fund's scrutiny," Russian Federal Property Fund acting head Yury Petrov was quoted as saying.

It is known that the auction's proceeds will help pay off only one-third of Yukos' US$27-billion back taxes.

Experts have named Surgutneftegaz as the most likely owner of Baikal Finance Group. However, Surgutneftegaz press secretary Raisa Khodchenko declared that Baikal Finance Group has nothing to do with Surgutneftegaz.

Analysts are confident that Baikal Finance Group represents the interests of one or two major companies and was set up for bidding in the auction.

Interfax Group's SPARK database of companies suggested that Baikal Finance Group was registered in Tver a few days ago, the Interfax said.

A high-ranking expert representing a governmental agency thinks that Baikal Finance Group might not be able to pay for the Yuganskneftegaz stake within 14 days stipulated by the law as it does not have its own funds. In this case, the money may be paid by the other bidder in the auction -- Gazpromneft, he said.

Meanwhile, the Russian largest gas company Gazprom and its subsidiary Gazpromneft, as well as TNK-BP, Surgutneftegaz and Lukoil have said they have nothing to do with Sunday auction's winner Baikal Finance Group.

Gazprom, the Russian gas giant, had been widely believed to be the most likely winner of the auction.

Russian embattled oil giant Yukos Wednesday made a filing in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, in an attempt to stop the auction of its major asset Yuganskeneftegaz.

The US court on Thursday ordered a 10-day halt to the planned sale of Yuganskneftegaz to allow the embattled oil firm time to seek a permanent injunction.

The Russian authorities insist on handling the matter under Russian law, noting that the US court ruling has no legal effect in Russia as Russia and the United States have no bilateral agreement on mutual recognition and execution of court rulings.

Russian Foreign Minister Sergei Lavrov declared Friday that the legal case against the country's embattled oil giant Yukos will be handled under the Russian law.

Yukos is facing a judicial investigation that many critics see as a Kremlin-inspired onslaught against former Yukos chief executive Mikhail Khodorkovsky who has been jailed for more than a year on charges of fraud and tax evasion.

(Xinhua News Agency December 20, 2004)