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Khodorkovsky in new trial for embezzlement

Video by Sophie DAVIDSON

Text by Khatya CHHOR

Latest update : 2009-09-03

Imprisoned Russian tycoon Mikhail Khodorkovsky (pictured) begins a new trial on Tuesday for embezzlement and financial mismanagement. The former head of the Yukos oil giant faces a possible sentence of more than 22 years.

Just two days after the Unified Russia party of Prime Minister Vladimir Putin won predictable victories in regional elections, a onetime Kremlin critic and opposition supporter faces new charges that some believe are designed to keep him imprisoned well past Russia’s March 2012 presidential elections.


Now halfway through an eight-year sentence, Mikhail Khodorkovsky and his business partner, Platon Lebedev, face new charges of embezzling oil assets worth more than $20 billion between 1998 and 2003 and laundering an additional $20 billion, in part through Yukos subsidiaries.


The first hearing of new charges began today at a district court in Moscow and comes as Khodorkovsky became eligible for parole. If convicted, he could face another 22 years behind bars on top of his original sentence.


FRANCE 24’s Moscow correspondent Romain Goguelin says many Russia analysts consider this new trial “a reminder from the Kremlin to Russia’s businessmen to stay out of politics, as well as a way to keep Khodorkovsky behind bars until 2012 -- until the next presidential election.”


The 2003 arrest of Khodorkovsky, once Russian’s richest man and head of the now-defunct Yukos oil giant, came at a time when the Kremlin was looking to curtail the power of the billionaire oligarchs while consolidating control over Russia’s massive energy industry. Convicted in 2005 of fraud and tax evasion, Khodorkovsky was sentenced to serve his term at the Chita detention centre in Siberia.


Like many of Russia’s oligarchs, Khodorkovsky used his Kremlin connections to amass billions of dollars during the chaotic post-Soviet mass privatizations of the 1990s. But as that heady – and largely unregulated – decade came to a close, Yukos earned a reputation as one of Russia’s better-managed companies, which paid its taxes and began producing healthy dividends.


Some observers say Khodorkovsky’s real crime was breaking a tacit agreement that Russia’s emerging super-rich would restrict their activities to making money and staying out of politics. He famously angered the Kremlin by funding several opposition parties, including the Communists and the liberal Yabloko party, both fierce critics of the Putin leadership.


Allison Gill, director of the Human Rights Watch offices in Moscow, says the Russian government is pursuing two goals with the Khodorkovsky prosecutions. “The first is that the Kremlin is going to play a role in determining the fate of the country’s natural resources, like oil,” she says. “And the second is a warning to businessmen to curb their political ambitions.”


Khodorkovsky’s lawyers say the new charges simply don’t add up. A spokesman for his defence team told the Moscow Times on Monday that the alleged $25 billion embezzlement in oil assets is way over the mark.


"This amounts to Russia's annual oil production, or to what Yukos produced over the course of the years it was headed by Khodorkovsky," says Maxim Dbar.


Many see the new trial as a test for Putin’s successor, President Dmitry Medvedev, who has pledged to improve Russia’s image and make the country more attractive for investment.


But international investors, hard hit by the financial crisis, may have other things on their minds these days.


"Investors are utterly swamped by global events," Roland Nash, head of research at Renaissance Capital, told the Moscow Times on Monday. Compared to these concerns, he says, Khodorkovsky's legal problems are “ancient history”.






Date created : 2009-03-03