MOSCOW, October 9. /TASS/. Energy companies of the Urals Republic of Bashkortostan, which now make up Bashneft oil producer, were privatized without the Russian government’s permission, prosecutors said on Thursday.

“The property located on the territory of Bashkortostan belonged to the Russian Federation. No permission for privatization was obtained from the Russian Federation,” a prosecutor said at a session of the Moscow Arbitration Court, which was examining the Bashneft case.

“We believe that the property is currently unlawfully possessed. The Russian Federation has the right to demand this property back,” the prosecutor said.

The Moscow Arbitration court is examining a lawsuit filed by the Russian Prosecutor General’s Office against holding company Sistema and its subsidiary Sistema Invest on violations committed during the privatization of the Bashkortostan fuel and energy sector and the return of Bashneft’s assets to the state.

Court hearings on the return of oil producer Bashneft’s assets to the state will take place October 23.

The lawsuit was filed on September 26 jointly with Russia’s State Property Committee.

Sistema company rejects the lawsuit

A spokesman of Sistema holding company Thursday said the company objects to the lawsuit.

Bashneft is majority controlled by Sistema whose owner Yevtushenkov was placed under house arrest in September on charges of money laundering in the case of Bashneft’s acquisition. Sistema held a 63.16% stake in Bashneft while its subsidiary Sistema Invest possessed 10.67%.

The court ruled on September 25 to arrest the Bashneft shares owned by Sistema and its subsidiary Sistema Invest.

In July, Moscow’s Basmanny Court ruled to arrest the Bashneft shares owned by Sistema as a protective measure in the case of violations committed during Bashneft’s privatization.

Prosecutor General’s Office spokeswoman Marina Gridneva earlier said that an audit exposed serious violations committed during the sale of Bashkortostan fuel and energy companies.