Investors in the former Russian oil company Yukos expect to receive a multi-billion pound financial settlement on Monday in a landmark case that threatens maximum embarrassment for BP and the Kremlin at a sensitive time. Europe's top arbitration court in The Hague has been hearing a case about the illegal expropriation of assets brought by five investors including the former Yukos chief executive, Platon Lebedev. A ruling in favour of GML, the majority shareholders in Yukos, would be damaging to BP because the disputed Yukos assets ended up in the hands of another major oil company, Rosneft, in which it owns a 20% stake. It would also be a setback for the Kremlin at a time when it is under pressure from the west over its role in eastern Ukraine.
The claim, under the energy charter treaty, amounts to $103.5bn (£61bn). Yukos was originally set up by Mikhail Khodorkovsky with Lebedev's help, but the company crumbled in 2004 when the Russian government demanded it paid $27bn in taxes. Both Khodorkovsky and Lebedev were jailed. They have recently been released, but Yukos's oil fields and other assets were auctioned off and eventually bought by Rosneft. Yukos, once Russia's biggest company, and many western supporters maintained that the tax bill and jalings were a result of Vladimir Putin wanting to rid himself of oligarchs who were using their corporate power base to meddle in politics. But the Kremlin has always argued that all the actions taken against Yukos and its executives were entirely justified under the Russian law. Khodorkovsky sold off his interest in Yukos to pay his legal expenses, but Lebedev has led GML to bring what is believed to be the largest ever arbitration case in history.
Tim Osborne, a British lawyer and director of GML, is planning to make a statement about the arbitration findings when the court in The Hague makes its final ruling at 9am London time.
The result remains unknown, but a spokesman for GML said: "We are organising a big press conference. We would not be doing this unless we firmly expected to win."
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Portugal's Banco Espirito Santo (BES) has reported a bigger-than-expected loss of 3.6bn euros ($4.8bn; £2.8bn) for the first six months of the year.
The troubled bank said "extraordinary events" had resulted in costs totalling 4.25bn euros during the period.
The loss wipes out BES's existing capital buffer of nearly 2.1bn euros - cutting it to below the minimum level required by regulators.
The lender said it will begin a process to raise cash to meet capital rules.
"Over the course of the past few weeks, both shareholders and potential investors have shown interest in participating in a capitalisation plan, some of them willing to take relevant stakes in the bank," Chief Executive Vitor Bento said in a statement.
Tough times
The larger-than-expected loss comes as BES - Portugal's largest private bank - has been under increased scrutiny.
There have been concerns over the financial strength of the bank's parent company and its ability to deal with its debt problems.
The fears were fanned after parent companies linked to the Espirito Santo family sought protection from creditors.
That has hurt the bank's share price, which has slumped almost 40% in July.
The worries had also prompted the governor of Portugal's central bank to issue a statement earlier this month aimed at reassuring depositors and investors about the health of BES.
The central bank had said at the time that investors had "no reason to doubt" the security of funds, and savers had "no need to be worried".
Restructuring
The lender has also been trying to restructure its senior management.
Earlier this month, it accelerated the appointment of new executives, originally due to start at the end of July.
The Bank of Portugal ordered the changes to be fast-tracked after worries about the financial strength of the bank's parent company hit global stock markets.
Speculation surrounding accounting regularities at the parent company of BES, Espirito Financial Group, led to three family members being replaced.
Espirito Santo Financial Group, which holds a 25% stake in BES, previously said economist Vitor Bento would be the new chief executive of the bank from the end of July and Joao Moreira Rato, who heads Portugal's IGCP debt agency, would become the chief financial officer.
Meanwhile, Jose Honorio becomes deputy chief executive officer.
The three replace the Espirito Santo family members, including its patriarch Ricardo Espirito Santo Salgado, who announced his resignation as chief executive of BES last month.
Mr Salgado, who ran the bank for 23 years, was arrested last week in connection with a money laundering and tax evasion investigation.
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