Russian oil tycoon on trial for fraud to face further charges

Published on Saturday 14 May 2005 00:17

MIKHAIL Khodorkovsky, the jailed Russian oil magnate awaiting the verdict of his tax evasion and fraud trial, is to face new charges, Russia’s Prosecutor-General’s office said yesterday.

The statement that Khodorkovsky would face charges for money laundering came just three days before the verdict is to be announced in the trial of the former head of the Yukos oil giant and his business partner, Platon Lebedev. Lawyers for Khodorkovsky said the timing of the announcement was aimed at pressuring the court to find him guilty.

Many observers say the case is the Kremlin’s punishment for Khodorkovsky’s funding opposition parties and to obstruct the power of the tycoon once ranked as Russia’s richest man.

Others contend that the parallel carve-up of Khodorkovsky’s Yukos empire against a $28 billion back-tax bill was orchestrated by powerful Kremlin clans. Yukos’ main production unit, Yuganskneftegaz, was sold off against the tax debts in a state-ordered auction in December. It was sold to a mysterious company that in turn was acquired by state oil company Rosneft.

Yury Schmidt, a lawyer for Khodorkovsky, said his client had been told months before that he and Lebedev were being investigated on money laundering claims and the list of charges against his client had been expected to grow.

"The fact that this is done on the eve of the verdict is very strange and in my opinion is a form of pressuring the judge," Mr Schmidt said. "There is no procedural necessity to make this announcement now."

Prosecutors want Khodorkovsky, 41, to receive the maximum ten years. Together with Lebedev, he is charged with rigging a privatisation auction in 1994, stripping profits from a major fertiliser component maker, illegally using onshore tax havens to slash Yukos’ tax bills as well as dodging millions in personal income tax.