The Financial Services Authority (FSA) and the London Stock Exchange (LSE)
will break the law against dealing in "dirty money" if they allow the flotation of Rosneft, the Russian state oil company, to go ahead on Wednesday, a High Court judge was told today.

Clare Montgomery, QC, representing Yukos, a Russian oil company which is trying to block the flotation, said potential investors in Rosneft are being misled into believing that there were no legal problems with the listing of its shares.

The flotation would amount to money laundering under the Proceeds of Crime Act because 70 per cent of the value of Rosneft’s shares resulted from the unlawful seizure and sale of Yukos assets by the Russian government, she told Mr Justice Charles in London.

Ms Montgomery contested legal advice given to the FSA and LSE that Yukos’s objections were "non-justiciable" - not open to legal challenge - in the English courts, because the courts had no power to interfere in the actions of a foreign state.

She urged the judge to grant Yukos permission to seek a judicial review of decisions by the FSA and the LSE to admit the shares, plus an injunction blocking the flotation pending a full hearing.

Yukos claims that Rosneft’s main oil producing subsidiary was "stolen" by illegal seizure of its assets following bogus multi-million-dollar tax claims by the Russian authorities.

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