STATE TO SELL YUGANSK IF BAIKALFINANCEGROUP FAILS TO PAY

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MOSCOW, December 20 (RIA Novosti) - The obscure Baikalfinancegroup won the Yuganskneftegaz auction, yesterday. If it fails to pay, the acting legislation leaves the state a free hand to appoint another buyer and charge a price without a repeated auction, a high government functionary said to the media today.

The anonymous informant could not say what Baikalfinancegroup was. There are many conjectures. According to one, it is a mere front company knocked up just for the auction. "There may be offshore companies behind it-we can't be sure," he remarked.

Alexei Kudrin, Finance Minister, does not know any details about the company either. Things will get clearer as soon as Baikalfinancegroup has to pay for its big purchase, he said to newsmen.

Vladimir Grabarnik, vice-governor of the Tver Region in Central Russia, was somewhat more explicit. "We possess certain information but we can't make it public for now. Baikalfinancegroup will speak for itself, later on," he said to Novosti in a telephone interview.

"This is certainly a man-of-straw-that's an open secret," he added.

"True, the company has no office at its legal address, but that's not alarming. Such things are the usual practice," reassured the vice-governor.

Baikalfinancegroup came on top as it offered more than 260 billion rubles for Yuganskneftegaz 76.79% block auctioned off (today's Central Bank rate is R27.88/$1). Yugansk is the main production asset of Yukos.

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