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Since 1st March, 1999
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Tycoon crackdown: The inside story
- Hands above your heads, don't move or we will shoot
File pictures show an armed investigator and an unidentified man leaving the Moscow office of Yukos (top) owned by Mikhail Khodorkovsky (below). (Reuters)

Moscow, Nov. 2: It was 5 am exactly a week ago when a private Tupolev 154 jet landed at the freezing Siberian airport of Novosibirsk to refuel.

As the plane taxied to a halt, two minivans with smoked-glass windows sped across the bumpy tarmac through the darkness. More than a dozen heavily armed men wearing combat fatigues jumped out and swarmed up the steps to the forward cabin where Mikhail Khodorkovsky, Russia’s richest man, was sitting.

“This is the FSB (the federal security service), hands above your heads, don’t move or we’ll shoot,” one of the men shouted. Then another turned to the tycoon and said: “We have orders. Follow us.” As Khodorkovsky was being led away he must have known that it was dangerous even for a man who runs Russia’s richest company and the world’s fourth largest oil concern to cross the KGB men at the heart of the Kremlin.

But that is what he had done when he reneged on an unwritten deal struck three years ago with President Vladimir Putin not to enter into politics. Despite repeated warnings, this year he began buying up political support before the state Duma, or parliament, elections next month.

Eric Kraus, the chief strategist at Sovlink Securities, an investment bank, thinks Khodorkovsky’s actions made his own downfal inevitable. He said: “Khodorkovsky seems to have been suffering from rock star syndrome. Everybody lobbies, but he seems to have thought he could buy control of the Duma.”

From Siberia, Khodorkovsky was taken to Matrosskaya Tishina, a notoriously overcrowded prison in eastern Moscow. Charged with fraud, tax evasion and forgery to the tune of £600 million, he now spends his days in a tiny cell with two bunk beds and a lavatory hidden by a flimsy partition. He is allowed to shower once a week.

Breakfast is thin fish soup and tea, dinner buckwheat with butter. Midweek he received his first package from outside — a tracksuit, slippers and chocolate.

As Khodorkovsky plots his comeback, newspapers have been running banner headlines calling his arrest a “coup d’etat” and speculating that a return to totalitarian rule is imminent.

The story of Khodorkovsky seems to be the end of a wild chapter of Russia’s history under which well-connected businessmen acquired state assets for peanuts, providing the funds for the orgy of luxury spending London shopkeepers see.

Most Russians will probably not be unhappy to see the richest of the so-called oligarchs suffer. They see the Yeltsin era and the rise of the oligarchs as the low point in a century of disasters.

Grigory Yavlinsky, the leader of the Yabloko faction, which is partially financed by Khodorkovsky, decried Putin’s move, accusing him of Stalinism.

He told The Daily Telegraph yesterday: “In the 21st century you can’t create a succesful economy without political freedom. If the people have no freedom, no human rights and no protection, how can they work'”

Putin has been fighting hard to scotch rumours of a return to the bad old days of the command economy. He reassured a meeting of Russian and western investment bankers in the Kremlin, appointing Dmitry Medvedev, considered a loyalist but a moderate, to replace Alexander Voloshin, his presidential chief of staff who had resigned in protest.

Some even believe the fall of Khodorkovsky could yet prove a blessing in disguise for Russia.

Chris Weafer, chief strategist at Russia’s Alfa Bank, said: “If this works out well, it will actually be much better for the investment case. It means the government will be able to push reforms through and make a clear distinction between state and business. The oligarchs have been blocking Putin’s reform plans.”

Defamation suit threat

Khodorkovsky is suing for defamation. He has instructed lawyers to draw up a case against the general prosecutor.

The head of the privatised oil giant Yukos has strenuously denied the charges against him. He also claims that, as he has not been convicted, the prosecutor has acted illegally in making details of the case against him widely available.

“The language being used by the prosecutors is both insulting and subjective and implies that he has been involved in organised crime,” said one Yukos official in Moscow.

“Khodorkovsky denies all the allegations. It is unprecedented in Russia for businessmen to be treated in this way. The general prosecutor has violated his reputation.” Khodorkovsky, 40, is expected to complain formally about the manner of his arrest.

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