MOSCOW: President and chief executive officer of embattled Yukos Oil Co Steven Theede resigned Thursday hours before a meeting of the creditors of the company, saying he feared the meeting would recommend liquidation of the company.

Theede said in a letter to the board of the company that there was nothing more for him to be accomplished that could benefit the company in a material way.

Theede said he is boycotting the creditors’ meeting, calling it a “sham” which would lead to the breakup of the company. His resignation comes into effect 1 August.

Yukos, once the largest oil producer in Russia, is crippled by a $33 billion back-tax claims and is now facing bankruptcy in a Moscow court. The company has been facing the crisis after a controversial annexation and sale in 2004 by the Russian government of its OAO Yuganskneftegaz, which accounted for two-thirds of the company’s oil production.

Theede, a U.S. citizen, said he exhausted all possibilities to either preserve or recover value for the company after the “expropriation of Yuganskneftegaz.”

One of Yuko’s largest creditors is OAO Rosneft, which tripled its oil output at the end of 2004 by acquiring Yuganskneftegaz.

Theede said the court-appointed bankruptcy supervisor, Eduard Rebgun was expected to conclude at the creditors’ meeting that the restructuring plan was unworkable and liquidation was the only alternative. He said Rebgun had valued the company at $15 billion and its debts at $17 billion.

Theede said the valuation is only “one-half of its external appraised value.” He added that under the restructuring plan proposed by the management, Yukos will still be worth at least $15 billion after settling all its debts within the two-year time frame required under Russian laws.

Yukos and its main owner, Group Menatep Ltd, decided not to send a representative to the meeting for fear of possible arrest.

The events that led to the final collapse of Yukos has been a politically controversial issue with the company’s founder, Mikhail Khodorkovsky having been jailed in a political initiative, alleged as a measure by Kremlin to suppress opposition.

Yukos shares dropped by as much as 11 per cent to 25.93 rubles.