Two steps forward, one back in TNK-BP legal battle

A police officer walks past a plaque of the oil firm TNK-BP at its headquarters in Moscow, June 11, 2008.

MOSCOW (Reuters) - BP's embattled Russian oil venture, TNK-BP, said on Tuesday it had won the latest round of a court battle in Siberia over its use of specialist secondees and had got work permits for 48 of its foreign staff.

However, in a reflection of the tortuous legal battles that threaten to paralyse the $38 billion (19 billion pounds) company, the Moscow prosecutor's office demanded a slew of fresh information on foreign employees and secondees with a very tight deadline.

TNK-BP, Russia's second biggest foreign investment, has been wracked by a long-running fight between BP and its four Russia-connected billionaire partners over business strategy and management control.

At the same time, the firm has been deluged with a wave of tax, labour and police inspections and visa problems. BP has accused the four billionaires of using 1990s-style Russian corporate raider tactics to win control but the Russian side says it just wants to improve the firm's performance.

The Kremlin insists it is staying out of the dispute, but investors are sceptical.

In the latest developments, TNK-BP's head of communications, Peter Henshaw, said the company had won a ruling in the Siberian city of Omsk. This lifted an injunction banning TNK-BP from using 148 foreign specialists seconded from BP.

In addition, migration authorities granted 48 out of 49 work permits pending for TNK-BP's permanent foreign employees, including those for all its senior managers. The remaining application was not for a senior manager, a company source said.

Reflecting the "two steps forward, one back" nature of the company's legal battles, prosecutors conducting a probe into alleged labour law violations issued a fresh big demand for information, a source with direct knowledge of the matter said.

PAYSLIPS

A copy of the demand seen by Reuters showed 32 separate requests for detailed information on specified foreign secondees and expatriate employees, including copies of their visas, work permits, expense reports, payslips, labour contracts, vacation schedules and job titles.

The request was dated July 10 and gave four days for all the information to be supplied.

A source with direct knowledge of the matter said the demand was delivered to Viktor Vekselberg, chairman of the TNK management company, on July 10 but was only passed to TNK-BP CEO Bob Dudley on Monday, the day the deadline expired.

Vekselberg, one of the four billionaire shareholders, has supported calls from the Russian side for Dudley's resignation, alleging favouritism to BP. BP has supported Dudley, saying he acts independently.

In a more positive development on the work permit front, migration authorities indicated that a further 14 applications for TNK-BP foreign employees, which they initially refused because of incorrect paperwork, would now be considered.

Henshaw cautioned, however, that additional legal steps were still required before the foreign secondees could return to work. The Moscow bailiffs have served an enforcement order on TNK-BP and this must be lifted first, he said.

In addition, BP has already pulled out 88 of the secondees from Russia because of the lengthy court battle and uncertainty over its resolution.

A little-known brokerage called Tetlis took TNK-BP to court in May, arguing the use of secondees amounted to an unfair special dividend to BP. BP denied this allegation.

Two of Tetlis's managers used to work in the 1990s for companies connected to Alfa Group, the main business vehicle of two of the four Russian billionaire shareholders in TNK-BP, but the Russians deny any link.

However, the Russian shareholders have consistently said they want a big cut in the number of foreigners working at the company because they are too expensive and can be replaced with Russian specialists.

(Editing by Paul Bolding)