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TNK-BP faces new probe by Russian inspectors

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TNK-BP faces new probe by Russian inspectors

By Catherine Belton in Moscow

Published: July 9 2008 03:00 | Last updated: July 9 2008 03:00

Russian tax and labour inspectors have begun fresh investigations into TNK-BP, increasing the pressure on BP ahead of a key meeting with its Russian partners.

Tax inspectors have demanded reams of documents relating to payments made to BP specialists seconded to the company from 2006 to 2007, TNK-BP said.

The company received the demand on Monday just hours after Gordon Brown, the UK prime minister, left talks with Dmitry Medvedev, the Russian president, at the G8 summit without progress on the bureaucratic problems engulfing the 50:50 oil venture’s foreign staff amid an escalating battle for control of the company. BP is locked in a bitter corporate war with its Russian billionaire partners in TNK-BP.

The Moscow labour inspectorate also added to the pressure by launching a fresh investigation yesterday into whether the company’s main management unit, TNK-BP Management, and its BP-backed chief executive, Robert Dudley, were in compliance with labour laws.

A person with direct knowledge of the situation said Moscow labour inspectors launched a check yesterday and said they would return to the company’s head office today accompanied by officials from the Moscow prosecutor’s office.

The insider said TNK-BP had moved to eliminate 14 “minor violations” found by the Moscow labour inspectorate, but two had yet to be fully dealt with. The inspectorate could choose to interpret the remaining discrepancies as failure to comply with the labour code, and demand that Mr Dudley is suspended from his post.

Prosecutors from the central district of the Moscow prosecutors’ office are also set to investigate the company in response to a complaint from unions who said an earlier check into labour code violations by a lower department in the prosecutor’s office had not been conducted adequately. That department said it had only found insignificant violations of labour laws when it completed its investigation this month, and said it had found TNK-BP to be “highly organised” and well run.

“This is all part of the mounting pressure,” said a person close to the company. “The secondees have been working at the company for four and a half years and it’s all been perfectly fine. This is a clear retaliation to BP suing the Russian share-holders over the tax claim.”

Stan Polovets, chief executive of the Alfa-Access-Renova consortium through which the Russians hold their 50 per cent stake, said this suggestion was “nonsense”. “We are going to fight the tax claim in court not with tax inspections,” he said. BP is to meet the Russian shareholders at a key board meeting on Friday, where AAR is to make a renewed call for Mr Dudley’s dismissal.

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