Oil tycoon jailed for nine years

Published on Wednesday 1 June 2005 00:20

RUSSIAN oil baron Mikhail Khodorkovsky was jailed for nine years by a Moscow court, yesterday, in a sentence that provoked a storm of international criticism.

Khodorkovsky, once Russia’s richest man, was sentenced at the end of a marathon 12-day reading of a guilty verdict on six charges of fraud, embezzlement and tax evasion in Moscow’s tiny Meschansky Court.

George Bush, the United States president, led the criticism yesterday, saying "it looked like he had been judged guilty prior to having a fair trial".

Supporters of the Russian tycoon insist he is the victim of a political prosecution, ordered by the Kremlin after Khodorkovsky began backing opposition parties.

As the sentence was read Khodorkovsky, sitting in a steel cage flanked by armed policemen, sat looking straight ahead. Asked by one of the three-strong panel of judges if he understood, he said "no sane person" could understand the verdict.

Robert Amsterdam, the oil baron’s Canadian lawyer, called the verdict "cruel and unusual punishment". He told The Scotsman: "It is a horrible to witness that kind of travesty."

Mr Amsterdam said he would take the case to the European Court of Human Rights should an appeal not be upheld at Russia’s supreme court.

Tom Lantos, a US senator, said he would table a motion to Congress calling for Russia to be ejected from the G8 group of industrialised countries, because the case had raised concerns about Moscow’s commitment to the rule of law.

"It seems that this political trial before a kangaroo court has come to a shameful conclusion," said Mr Lantos outside the court. "It is obvious that the conclusion of the trial was pre-determined politically."

The Russian prosecutor general’s office said it was satisfied with the court’s ruling. "We find the verdict fair and objective," a spokeswoman said. "It matches the actual circumstances of the case and the gravity of the crimes committed by the defendants."

President Vladimir Putin’s chief of staff, Dmitry Medvedev, has described the trial as "showcase" for other business leaders.

Khodorkovsky, 41, has been in jail since October 2003 when he was arrested by armed police in Siberia.

He was jailed alongside business partner Platon Lebedev on six of seven charges. Lebedev was also sentenced to nine years in jail. A seventh charge was ruled inadmissible because it was outside a ten-year statue of limitations. Khodorkovsky and Lebedev also were ordered to pay 337 million in taxes and penalties.

What made the case so controversial was its timing. In 2003 Khodorkovsky had begun diverting some of his 8 billion fortune into the coffers of parties opposed to Mr Putin. He had also began talks to buy other Russian oil companies and begin joint ventures with US firms that would have increased his political power. Since then, his former company, Yukos, has been charged more than 20 billion in back taxes and the government sold its main oil production facility back to a state-controlled oil firm, provoking criticism of a "back-door re-nationalisation".

Yukos called the verdict "a gross travesty of justice".

A statement on the company’s website said: "This verdict is a tragic example of the authorities turning a law-enforcement and judicial system against an individual for political ends".

A final judgment by the outside world will depend on a detailed analysis of this marathon case.

As with many fraud trials, guilt depends on an often complex judgment about on which side of the law sit complicated financial actions.

But the political storm seems likely to grow even before such analysis is complete. Questions are being asked about why the tycoon was singled out for prosecution when many others have murky pasts.

Both Amnesty International and the European Union have already criticised the conduct of the trial, saying there was evidence of political pressure, and if the verdict also fails to hold up, such criticism will increase.

Even events outside the courthouse have caused controversy. For the first few days of the verdict, several hundred pro-Khodorkovsky demonstrators waved placards and chanted anti-Kremlin slogans outside the courthouse. Then workmen suddenly turned up to make road repairs, parking heavy machinery in positions to block the protesters.

Alarm bells have already been going off in the boardrooms of leading Western companies as a result of the trial and because of an unexpected back tax bill of 500 million levelled on BP, Russia’s largest outside investor, in April.

The Khodorkovsky camp says the as yet unexplained delay in the verdict, originally due on 27 April, was due to the Kremlin’s wish to avoid embarrassment prior to May’s Victory Day celebrations.

For Khodorkovsky, the ordeal is not yet over, with the prosecutor general’s office confirming that new charges, as yet unannounced, will be levelled at the tycoon.