Preliminary Hearings opened yesterday in the trial of Platon Lebedev, a major shareholder of the embattled Yukos oil company and a close associate of Mikhail Khodorkovsky, Russia's richest oligarch, who is also awaiting trial on similar charges of fraud and tax evasion.
Mr Lebedev has been in jail since his arrest in July. Yesterday the court rejected his lawyers' request for him to be released from custody as prosecutors argued there was a risk of him attempting to pressure witnesses or fleeing the country.
Mr Lebedev was chairman of Menatep, a finance company founded by Mr Khodorkovsky which holds 44 per cent of the oil giant Yukos. Prosecutors allege that Mr Lebedev and other officials at Menatep won a 20 per cent stake in the 1994 privatisation of a fertiliser maker Apatit through a complex scheme involving several fake bidders. They say the shares were bought for about $210,000 (£117,000) - far less than their potential worth - and that the company that purchased them failed to fulfil a pledge to invest $283m in Apatit.
Mr Khodorkovsky, whose personal fortune is estimated at $15bn, is accused of masterminding the scheme. Mr Lebedev's worth is about $1.8bn, according to Forbes magazine.
The Apatit privatisation was one of the so-called loans-for-shares deals in which the Russian government sold state assets for nominal sums to those who made the highest investment pledges. Many such deals were tainted with fraud, and critics of the official investigation against Yukos have accused prosecutors of applying selective justice by singling out Mr Khodorkovsky and his associates.
Mr Lebedev faces up to 10 years in jail if convicted, and could also see his assets, including Yukos shares, confiscated.Reuse content