Prosecutors say Nikolai Lubenets, the mayor of Tryokhgorny in the Chelyabinsk Region, provided tax breaks for front companies registered in his district as Yukos subsidiaries, enabling several hundred million dollars in tax payments to be diverted from the regional and federal treasuries.
Yukos was forced into liquidation earlier this year after failing to pay nearly $28 billion in back taxes. Its founder and former chief executive, Mikhail Khodorkovsky, is serving an 8-year prison term in Siberia for embezzlement and fraud.
The Prosecutor's General Office, which sent the case against Lubenets to the Chelyabinsk Region court Wednesday, said in a Web posting: "As mayor, Lubenets abused his powers in 1999-2000, when he illegally granted additional tax privileges to Yukos-controlled front companies. The municipality's budget was deprived of more than 10 billion rubles [about $373 million] in tax revenue."
The companies Nortex, Kverkus, Greis, Muskron and Virtus are named among the entities registered in Truyokhgorny as subsidiaries of Yukos, Russia's former No.1 oil producer.
