MOSCOW, Aug 1: The Yukos Oil Company, once Russia's largest oil producer, was declared bankrupt on Tuesday by a Moscow commercial court despite a last-minute appeal by the firm's lawyers.

“The court declares Yukos bankrupt and initiates liquidation of the company,” Judge Pavel Markov said.

The court also appointed Eduard Rebgun, who had been acting as administrator for the troubled oil giant, to oversee the receivership process.

“All the assets will be sold,” Rebgun told reporters after the court's decision.

The ruling came at the request of creditors, who included Russian tax authorities and Rosneft Oil Company, after a majority of creditors rejected a rescue proposal from the Yukos management.

“This is a death sentence for the company,” said Drew Holiner, a Yukos lawyer, before adding that the group would appeal against the ruling.

It spelled the end of a company, which had become a virtual empire under ambitious former chief executive Mikhail Khodorkovsky, who is now languishing in a Siberian prison.

The arrest of Khodorkovsky in 2003 and the subsequent dismembering of Yukos by Russian authorities have been seen as a defining episode in President Vladimir Putin's rule, a signal that post-Soviet Russia is ready to liberalise only within strict limits imposed by the centre.

Commentators maintain that the Kremlin saw Khodorkovsky's influence as a challenge to its authority that could not be tolerated.—AFP