VLADIMIR PUTIN, the President of Russia, yesterday sought to reassure the country’s business elite that they were safe from Yukos-style legal assaults as long as they paid their taxes and showed more social responsibility.

At a meeting of Russia’s top business lobby, Mr Putin effectively outlined the Kremlin strategy that has driven the legal attack on Yukos and its founder, Mikhail Khodorkovsky.

As the Yukos saga staggers towards its conclusion — most likely the sale of its core asset to a state-controlled or Kremlin-friendly investor — Mr Putin emphasised that he did not want to reverse the privatisations of the 1990s.

But he sent a clear message that the Kremlin expected the oligarchs, who snapped up state assets for a song after the Soviet Union’s collapse, to co-operate with the Kremlin.

“Business should get used to paying taxes and observing the law and not seek ways to avoid paying taxes,” Mr Putin said in his speech to the Russian Union of Industrialists and Entrepreneurs.

“The state will guard the interests of reputable business, and large-scale investigations, including tax probes, should not be regarded as a signal that every newly founded company poses a threat to the state’s interests,” he said.

Several oligarchs, including the metals tycoon Vladimir Potanin, welcomed Mr Putin’s remarks, reflecting the more submissive mood among Russia’s business elite.

Mr Putin did not mention Yukos, but the underlying threat was clear. Yukos faces imminent ruin after being hit with $18.5 billion (£10 billion) in back tax claims.

Yesterday, the company announced losses of 183 billion roubles (£3.4 billion) for the first nine months of the year, compared with profits of 22.7 billion roubles in the same period last year.

Mr Khodorkovsky, meanwhile, is still on trial for tax evasion and fraud and could go to jail for up to ten years if convicted. The Kremlin is widely believed to have instigated the case to punish Mr Khodorkovsky for challenging its authority by funding opposition political parties and hinting at running for President.

Bruce Misamore, Yukos’s chief financial officer, said yesterday that the company had paid $3.9 billion of its tax bill.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax