When the oligarchs realised the game was up they quickly convened an extraordinary general meeting at which they voted themselves a huge $2bn interim dividend, by far the biggest Yukos (or any other Russian company) had ever paid. The oligarchs quickly shifted the monies into offshore Guernsey trusts. This was the first in a series of momentous self-destructive decisions that eventually led to the failure of Yukos. As the Russian Federation’s defence submission submitted in The Hague on 29 July 2011 details:

“Claimants assert that because of the gathering investigation, which they allege had been focused on taxation matters, Mr. Illarionov warned Mr. Khodorkovsky to leave the country in September 2003.  If that is so, while they claim Mr. Khodorkovsky elected not to follow this warning, Claimants moved quickly to move as much more money out of Russia as possible to enrich themselves and make the funds unavailable to pay taxes.

Only few weeks after the alleged Illarionov-Khodorkovsky meeting, on September 25, 2003, a decision to convene an extraordinary general meeting of Yukos shareholders was taken, at which the company’s majority shareholders—i.e., the shell companies appearing as Claimants in these proceedings—approved the payment of an interim dividend for 2003 of RUB 59.9 billion, or approximately US$ 2 billion.

This was by far the largest dividend ever paid by Yukos in its corporate history and, indeed, ‘unprecedented’ for a Russian Company.

Also unprecedented was the haste with which this gigadividend was declared. Previously, Yukos had paid only comparatively small interim dividends, waiting until the close of the fiscal year to make major distributions of profits.

The Fall 2003 interim dividend betrays an unusual sense of urgency on the part of those who proposed it—Claimants and the managers whom they had appointed—who evidently sensed the gathering storm, wanted to get as much money as possible, as quickly as possible, out of the company, and out of Russia, and into their pockets.

Although Claimants may have thought it clever at the time to extract such a huge sum out of Yukos at the eleventh hour, the long-term cost to the company (and other shareholders) was enormous, because the Fall 2003 dividend—especially when viewed in the light of Yukos’ subsequent claims that it did not have the means to pay its tax bills—sent an unambiguous message to the authorities that Yukos’ management, in confronting the tax crisis, would not hesitate to play foul. From this perspective, the US$2 billion dividend was the first in a series of momentous, self-destructive decisions by Yukos’ management that ultimately led to the company’s demise.

In fact, as shown by Professor Lys in his report, Claimants Hulley, VPL, and YUL received an amount of approximately US$ 1.4 billion462 out of that unprecedented US$ 2 billion dividend.  The record suggests that, after receipt of that money by Claimants, it was paid out to the Oligarchs.  Concurrently, on or around October 25, 2003—i.e., the day of Mr. Khodorkovsky’s arrest—each of the Oligarchs transferred his shareholding in GML into the Guernsey Trusts.”