Abramovich Faces Legal Threat From Yukos Over Broken Deal

Yukos, the beleaguered Russian oil company, is contemplating legal action against Roman Abramovich after the Chelsea football club owner allegedly blocked its merger with rival Sibneft.

Abramovich, who is Sibneft's biggest shareholder, could be liable for millions of dollars in compensation for reversing the half-completed deal at the eleventh hour, claim sources close to Yukos.

The company says Sibneft's withdrawal in December is unlawful and is pressing for the merger to be implemented. One source said: 'Abramovich is interfering with the management of Sibneft, a company that, as far as we are concerned, is now a subsidiary of Yukos.

'His actions have also damaged confidence in the Yukos brand and affected its share price. Yukos will take every step to resolve this through negotiation, but if that fails, judicial steps will be taken against Abramovich and Sibneft.'

The planned merger was blocked after Mikhail Khodorkovsky, Yukos's former chief executive, was dramatically arrested on fraud charges, sending the company's shares into a tailspin.

Yesterday, a spokesman for Abramovich declined to comment on the threat of legal action, but said: 'The core shareholders of Yukos and Sibneft agreed to undo the merger. Whatever the Yukos managers say, it is what the core shareholders want that is important.'

The Chelsea tycoon is facing an official probe into his governorship of Russia's Chukotka province, although he has not been accused of wrongdoing.