Posted Sunday, June 27, 2004

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Sunday, June 27, 2004


Khodorkovsky: From billionaire to cage in court

Mikhail Khodorkovsky, former chief executive of Russia's oil giant Yukos, went on trial. (Xinhua/AFP Photo)

BEIJING, June 27 (Xinhuanet) -- MOSCOW: Russian oil tycoon Mikhail Khodorkovsky's US$1 billion fraud trial was adjourned on Wednesday in another false start to the country's highest-profile prosecution since the 1991 fall of the former Soviet Union.

The court will reconvene on July 12 after it accepted a defence petition for more time to review case documents, tribunal chairwoman Irina Kolesnikova said.

Khodorkovsky, the main owner of oil major YUKOS, was brought handcuffed to a security guard from jail to the court, where he and co-defendant Platon Lebedev were caged.

But the hearing was adjourned after less than two hours.

KhodorkovskyProcedural sparring means the court has yet to address the seven counts against Khodorkovsky, 40, who faces 10 years in jail if convicted for his role in the 1994 privatisation of a fertilizer firm and tax evasion.

There is little doubt over the ultimate outcome, however, with even Khodorkovsky's defence team predicting a guilty verdict in a prosecution case it has denounced as illegal.

The trial marks a reckoning for the "oligarchs" who gained vast wealth and power in the helter-skelter privatisations of the 1990s while most Russians suffered a crushing slump in living standards.

Khodorkovsky, who denied the charges when his trial opened last Wednesday, became Russia's richest man after snapping up YUKOS at a rock-bottom price under the "loans for shares" privatisation scheme of the Boris Yeltsin era.

But some believe it was his support for the liberal opposition and refusal to defer to President Vladimir Putin that led to his arrest last October and prosecution. Other plutocrats who stayed out of politics remained free.

Another court resumed hearings over when YUKOS must pay a US$3.4 billion back-tax claim which the company said could bankrupt it if a freeze on asset disposals remains in force.

Putin said last Thursday, however, that YUKOS -- one of Russia's most profitable companies -- should not be allowed to go bust.

Senior government officials said this week that talks had begun on a possible out-of-court settlement.

Khodorkovsky and Platon LebedevHopes of a negotiated deal have lifted YUKOS's battered stock, but the company has still shed half of its value since before Khodorkovsky's arrest. It is now worth US$24 billion.

Analysts say that rather than forcing YUKOS to the wall, the Kremlin wants to exert pressure to force it to sell off choice assets - possibly to state-owned firms like Gazprom or oil company Rosneft.

That would effectively neutralize Khodorkovsky and his business empire well before Putin's second and final term ends in 2008, making it easier to plan an orderly succession.

(China Daily) Image above: Khodorkovsky and Platon Lebedev

Copyright ©2004 Xinhua News Agency.


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