THE flotation of Russia’s state oil company on the London Stock Exchange was last night heading into an unprecedented legal storm when a request was made to the High Court for an interim injunction to stop the listing of Rosneft’s shares.

Yukos, the beleaguered oil company whose principal asset is now owned by Rosneft, has made an application for judicial review to challenge the listing and an interim order that could, if it were granted, prevent the start of trading of billions of dollars in Rosneft stock at the end of next week.

Yukos is asking the High Court to review the actions of the Financial Services Authority, which considers the fitness of companies for admission to the Official List of the London Stock Exchange. At issue is the assertion by Yukos that Rosneft’s main oil-producing subsidiary, Yuganskneftegaz, was stolen in a fraudulent bailiffs’ auction organised by the Russian Government.

Yukos is likely to argue that the FSA has failed to consider that trading in Rosneft stock could carry the risk of money-laundering. A High Court judge is expected to decide today whether it will hear the application, following which the court will then decide whether to grant the interim injunction pending its judicial review of the listing.

The eleventh hour attempt to stop the Rosneft listing occurs as world leaders are about to gather in St Petersburg for the G8 summit, at which energy will be the top item on the agenda. An injunction would be an embarrassment for both President Putin and Tony Blair.

Yukos is asking the High Court to issue an interim order restraining the LSE before Wednesday next week, when the FSA is expected to approve Rosneft’s application.

The FSA said yesterday that it was aware of the application but would carry on unless it was ordered not to by the court. “We are intending to list the shares subject to approval of the prospectus,” an FSA spokesman said.

The FSA said that it was not aware of a previous attempt to seek a High Court order to stop a listing. “It could be a first,” said the spokesman.

The battle between Yukos and Rosneft stems from the arrest and imprisonment of Mikhail Khodorkovsky, the former chairman of Yukos, and a succession of multibillion-dollar tax claims against the company, which Yukos alleges were bogus.

Wrangling continued yesterday over the pricing of the Rosneft share sale as the Russian oil company’s advisers attempted to dampen the company’s ambition to achieve the maximum value.

Rosneft’s management is pushing for the maximum valuation of $80 billion, having secured applications of between $17 billion and $18 billion for a cash call of $10 billion.

The excess has been secured from foreign oil companies, including BP, which subscribed for some $6 billion worth of shares. Their support has been solicited by the Russian Government to ensure the flotation is successful.

Rosneft said last night that the court action would not affect its flotation plans.

“Our lawyers consider that suits and court cases like that have no effect whatsoever on the placement,” Nikolai Manvelov, the company’s spokesman, said.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts