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A Russian court has seized shares in oil company Bashneft, owned by Russian conglomerate AFK Sistema, while separately another court rejected a record bail offer of $8m for the release of Sistema's controlling shareholder Vladimir Yevtushenkov, who is currently under house arrest on money laundering charges. 

"The Moscow arbitration court has granted the request by the Russian Prosecutor General's Office, interim measures have been taken and Bashneft shares owned by Sistema and Sistema-Invest have been seized," the Prosecutor General's Office said in a statement on Friday, according to  Reuters. 

The case has been dubbed by some observers "Yukos II" as Yevtushenkov  is the first top tier oligarch to be arrested since the jailing of the owner of the Yukos oil company Mikhail Khodorkovsky almost exactly 11 years ago in October 2003. However, there are some big difference between that case and this one: Khodorkovsky was in an overt political fight with the Kremlin as he was pushing for an oil pipeline from Siberia to northwest China, a decision the Kremlin thought was a question of foreign policy and not a commercial decision. Yevtushenkov, on the other hand, is not known for getting involved in politics, nor has he challenged the Kremlin's power in any overt way. Sistema, which is listed on the London stock exchange, has been a darling of portfolio investors and a Russian blue chip stock. 

Separately another court rejected Yevtushenkov's application for bail on September 25 and he will  remain under house arrest until November 16 – without the use of a telephone. A Moscow court rejected what was a record bail offer of RUB300m, around $8m. 

At the same time, the court arrested stock in oil company Bashneft, owned by Yevtushenkov's holding company AFK Sistema. Yevtushenkov has been charged over his purchase of Bashneft from businessman Ural Rakhimov in 2009, after Rakhimov had allegedly fraudulently obtained the business while his father was president of Bashkiriya.

The moves suggest the likelihood of Bashneft soon changing hands, probably to a state-owned oil company such as Rosneft. 

A representative of the Investigative Committee requested the court to allow Yevtushenkov to travel to his offices and use his phone and internet, because of the important position he holds as owner of Russia's largest telecommunications company, MTS, like Bashneft held via Sistema. But the court refused the request.

Press were refused access to the court hearing. Unusually, according to business daily Kommersant, this occurred not only on the insistence of the prosecuting side, but it was also requested by Yevtushenkov's defence team.

The court's decision to prolong Yevtushenkov's arrest affected not only the Sistema share price, but also the ruble exchange rate, demonstrating how vulnerable Russia is to fears that the deteriorating  investment climate could prompt capital flight. Sistema shares dropped 8.5% compared to close of trading on September 24, while the ruble dropped 31 kopecks, reaching RUB38.46 to the dollar.

The companies which now comprise Bashneft were privatised by the Republic of Bashkiria in 2002 in favour of no-name firms that later transferred the shares to Bashkirskii Kapital, believed owned by the son of Bashkiria's president, Ural Rakhimov. The state audit chamber ruled in 2003 that the move was an “unprecedented theft of state property.” According to Kommersant sources, one of the conditions for the Kremlin supporting the reelection of Ural's father Murtaza in 2003 was that Bashneft be returned to state property; however this never happened. 

Yevtushenkov then bought the assets from Ural Rakhimov in 2009, shortly before Murtaza Rakhimov left office in 2010. Yevtushenkov himself was at the time regarded as strongly protected by and allied with former Moscow mayor Yury Luzhkov. But the Kremlin surprisingly fired Luzhkov in 2010 as well, leaving Yevtushenkov  exposed. 

Sources quoted by Kommersant believe there could soon be a change in the Bashneft shareholders in favour of a state company, most likely Rosneft, and that Yevtushenkov will not be released until this happens.

Further suggesting a new state owner for Bashneft will soon be found, state-owned investment bank VTB Capital has resumed coverage of the stock, proposing that investors capitalise on its cheap exposure to Russian oil.