Thursday, June 24, 2010

Mikhail Khodorkovsky's trial

by Lucian Kim

Mikhail Khodorkovsky spent a second day questioning ministers who served under former President Vladimir Putin as the trial of the imprisoned OAO Yukos Oil Co. owner revealed a split in the Kremlin.

Industry Minister Viktor Khristenko, who served as energy minister during Putin’s eight year presidency, told Moscow’s Khamovniki District Court today that he is unaware of “millions of tons” of oil being stolen as alleged by the prosecution. Former Economy Minister German Gref gave similar testimony yesterday.

“We’re satisfied with the answers we heard,” defense lawyer Konstantin Rivkin said after the three-hour testimony. “The answers shattered the indictment to its foundations.”

Khodorkovsky is already serving an eight-year sentence for fraud following a trial he said was motivated by his opposition to Putin. The 46-year-old, once Russia’s richest man, could get 22 1/2 more years if found guilty of stealing 350 million tons of oil from Yukos, which was later bankrupted and auctioned off under a $30 billion tax claim.

The appearance by Gref and Khristenko as defense witnesses was approved by the government and is “clearly” a sign of a disagreement within the Kremlin, Stanislav Belkovsky, head of the Moscow-based Institute for National Strategy, said by phone. “A final decision hasn’t been taken, so they’re leaving open various outcomes.”

State-run news channel Rossiya-24, which has ignored the trial since the prosecution started presenting evidence more than a year ago, reported from the court the last two days.


Putin, now prime minister, and his hand-picked successor President Dmitry Medvedev have repeatedly said that Khodorkovsky’s trials have nothing to do with politics and are subject to the rulings of independent judges.

“The physical theft of oil from the system is possible, but I’m not aware of the theft of a million, or millions of, tons,” Khristenko told Khodorkovsky, who posed questions from the courtroom cage he occupies with co-defendant and former business partner Platon Lebedev.

Khristenko also said he wasn’t informed that any Yukos production units had reported the theft of oil. Like Gref, the industry minister said that so-called transfer-pricing was practiced not only by Yukos, and that the government struggled to contain such tax-minimization schemes.


The defense has called the trial “tragi-farcical,” as the prosecution is claiming that the same oil on which Yukos was found to have evaded taxes was also stolen. When Khodorkovsky asked if the government would return taxes paid on oil that turned out to have been stolen, Judge Viktor Danilkin threw out the question because Khristenko isn’t a “tax expert.”

Khodorkovsky’s father Boris, who attended today’s hearing, said in an interview that he’s allowed to see his son one hour a month. His son won’t go into politics if he’s freed from prison, Boris Khodorkovsky said.

“All we can do is hope,” he said.

(from Business Week, June 22, 2010)

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