Khodorkovsky goes to court seven months after arrest

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The Independent Online

The Kremlin's legal onslaught against Russia's richest man, Mikhail Khodorkovsky, got under way in earnest yesterday when he appeared in a Moscow courtroom for the first pre-trial hearing since his arrest at gunpoint more than seven months ago.

Mr Khodorkovsky, 40, the former head of Yukos, Russia's largest domestic producer of oil, stands accused of tax evasion and embezzlement to the tune of $1bn (£550m).

Prosecutors claim that he headed a "criminal organisation" and President Vladimir Putin has made it clear that he takes a dim view of the way he did business. "Everyone should be equal before the law, irrespective of how many billions of dollars a person has on his personal or corporate account," he said. "Otherwise we will never teach and force anyone to pay taxes ... and defeat organised crime and corruption."

According to Forbes magazine, Mr Khodorkovsky has $15.2bn to his name, much of it tied up in Yukos shares which have halved in value since his arrest. The company has had its assets frozen and is facing a $3.5bn tax bill as well as the possible recall of two £2bn loans.

Yukos warned this week that it may go bankrupt by the end of the year. Its shares plummeted 13 per cent on the Moscow exchange yesterday having lost 12 per cent the previous day.

Mr Khodorkovsky's trial - which is expected formally to begin in the next month or two - is widely viewed as a Kremlin-orchestrated attempt to punish him for his nascent political ambitions. The high-profile oligarch, whose first business was running a café, was said to be entertaining presidential ambitions and used his considerable wealth to finance two anti-Putin political parties.

Mr Khodorkovsky's court appearance lasted four-and-a-half hours and took place entirely behind closed doors. Russia's increasingly powerful tax police asked and got more time to study the case and the judge ordered that he be given a fresh copy of the charges against him - previous copies had one or more pages missing. The next hearing is scheduled for 8 June.

Robert Amsterdam, one of the oil tycoon's lawyers, told The Independent that the authorities were using procedural errors to buy time. "When you are putting together a completely artificial case it's very difficult to keep the puzzle together," he said. "This case is entirely political. There is no rule of law in this country."

Mr Khodorkovsky was escorted to the Meshansky courtroom in Moscow under heavy police protection from the notoriously overcrowded tuberculosis-ridden prison where he is being held. Security was tight; not even his parents were allowed into the courtroom.

All requests to release him on bail have been turned down on the grounds that he may flee the country or seek to influence prosecution witness. His treatment is being investigated by the Council of Europe.

His mother, Marina Philippovna, told reporters that her son did not believe for a second that he would get a fair trial. If found guilty he could be jailed for up to 10 years and stripped of his assets. "He's innocent. I know my son, I know how I brought him up." She also claimed that he knew that the authorities were coming for him but decided to face the music. Having decided not to flee Russia he knew they could be waiting for him. However he doesn't regret his decision [to stay]."

Boris Berezovsky, a fellow oligarch who has been granted political asylum in Britain, spoke out this week against Mr Khodorkovsky's continued imprisonment without due process.

"It's very important to support Khodorkovsky," he said of his former rival. "He is not dangerous for society and he did not try to run away." Mr Berezovsky said the case was part of a battle between the Kremlin and business as the government attempts to "redistribute property in favour of Putin's cronies". He accused the President of being bent on systematically destroying independent businesses, politicians and journalists.

Stephen O'Sullivan, the head of research at United Financial Group, agreed that Mr Khodorkovsky's trial is purely political. "They [the Kremlin] want Mr Khodorkovsky and his partners out of Yukos and off the share register. That's the end game."

Andrew Neff of the World Markets Research Centre argues that Mr Khodorkovsky's perceived crime of minimising his own and Yukos's tax bill was nothing unusual. "In the West we would say that these were perfectly legal loopholes."

One unnamed analyst said: "They [the oligarchs] are all guilty. He's no more of a crook than anyone else."

Mr Khodorkovsky would have been fine, said Mr Neff, if only he had stayed out of politics. "Yukos is going to go down with the ship because they violated the Faustian pact not to get involved in politics. It's as simple as that."