The Telegraph
Since 1st March, 1999
Email This Page
Russia’s richest man held in swoop

Moscow, Oct. 25 (Reuters): Police snatched Russia’s richest man, YUKOS oil tycoon Mikhail Khodorkovsky, from his jet in Siberia today and hauled him before a Moscow court, charged with massive fraud and tax evasion.

After months of pre-election confrontation with President Vladimir Putin’s Kremlin, the move seemed calculated to demonstrate who was boss to the fabulously wealthy “oligarchs” who control post-Soviet Russia’s natural resources and industry.

It may also be a prelude to confiscating assets acquired in chaotic privatisations in the 1990s, investment analysts said.

“They want to cut him down to size,” one international official in Moscow said.

A spokeswoman for the general prosecutor said Khodorkovsky was grabbed on the tarmac at Novosibirsk after failing to appear for questioning in Moscow yesterday. State security agents flew him back to the capital where he was charged on seven counts, some relating to purchases of former state assets a decade ago. “It was decided to oblige him to appear,” she said.

A Moscow court later ruled that Khodorkovsky, who has backed liberal opponents of Putin and has been cited as a possible successor, should be held in jail, Interfax news agency said.

The prosecutor, in a statement, said an “unprecedented” $1 billion and more of “damage” was done by Khodorkovsky and Platon Lebedev — a key YUKOS shareholder held in jail since July. Prosecutors made clear the charges were brought against Khodorkovsky, a 40-year-old former Communist youth leader turned workaholic banker, both as an individual and as head of YUKOS.

Russia’s biggest oil firm, YUKOS recently engineered a merger with smaller rival Sibneft. US oil major Exxon Mobil is said to be interested in taking a stake. Neither Exxon nor another possible buyer, Chevron Texaco, commented on how the new turmoil might affect their intentions. Analysts said the arrest could open the way to Khodorkovsky and his associates being stripped of their stakes in YUKOS.

“This is clearly an endgame of some sort,” said one foreign banker. “I think we have a very powerful change in the making.”

Russia’s “$11-billion-man” has been embroiled in a war of words with the Kremlin ahead of parliamentary elections in December and Putin’s expected bid for re-election in March. His firms and associates have been subjected to major investigation.

Putin, a former KGB agent whom supporters hail for bringing order to the tumultuous nation that emerged from the rubble of Communism, is expected to stroll to victory in the spring.

Russian television showed Putin chairing his weekly meeting of top law and order officials today without comment.

Putin has preserved a lofty detachment in public from the disputes with YUKOS and other business empires. But he has made clear he does not wish to be in thrall to big business in the way his predecessor Boris Yeltsin was to the “oligarchs”.

Less fond of the champagne lifestyle of other tycoons that grates on Russians thrust into poverty, Khodorkovsky’s political ambitions have won him no more favour with the Kremlin than wealthy former Yeltsin allies like Boris Berezovsky, now cast into uneasy exile by looming lawsuits.

Email This Page