Russian oil executive and billionaire Mikhail Khodorkovskii has been arrested and is now facing what are described as massive fraud and tax evasion charges. Some cite his scandal as proof of a developing autocratic regime in Russia as Khodorkovskii is known to have many political ties.
Moscow, 27 October 2003 (RFE/RL)) -- Mikhail Khodorkovskii, the head of Russias largest oil company Yukos and considered the countrys richest man, was arrested on 25 October on a court order after he was brought in for questioning that morning. He is now being held in a Moscow prison (Matrosskaya Tishina).
Prosecutors accuse Khodorkovskii and chief Yukos associate Platon Lebedev, among other crimes, of robbing the state through shady privatization deals. Under Russian law, he can now be held until at least 30 December.
According to Yukoss press office, armed security service troops (FSB) troops removed Khodorkovskii from his private jet in Novosibirsk, where it was refueling for a flight to Irkutsk.
The Prosecutor-General's Office told RFE/RL that the fraud and tax evasion crimes are, "exceptionally large-scale." Prosecutor Tatyana Matyunina said, "The criminal cases for fraud and tax evasion by Yukos and the structures it controls are without precedent -- both by the sums involved in the fraud and tax evasion and the amount of investigative work. As of today, the damage caused by Khodorkoskii and Lebedev's actions amounts to more than $1 billion."
Lebedev has been in jail on fraud charges since July. Yukoss security service head, Aleksei Pichugin, is also in jail, on a double murder charge. In both cases, the deadline for prosecutors to complete their investigations is nearing -- 30 October and 19 November, respectively.
Yukos lawyers have called moves to arrest Khodorkovskii as, quote, "absurd" and "politically motivated."
"We consider this to be openly arbitrary, a way of putting pressure on the company, and a way of scaring [us]," said Yukos spokesperson Aleksandr Shadrin.
The recent dramatic turn in what has become known as the "Yukos Scandal" happens as Russia is gearing up for parliamentary elections in six weeks, on 7 December, and in which Yukos is seen as an indirect player.
Two Russian opposition parties that have been partly funded by Yukos, Yabloko and the Union of Right forces, said in a joint statement that Khodorkovskii's arrest changes, "the political situation for the worse."
Yabloko party leader Grigorii Yavlinskii warned the latest developments were simply more signs of Russia evolving toward what he called an autocratic regime.
"This has nothing to do with relations between business and the authorities. We already passed that stage. It is the formation of modern capitalism with a Stalinist face," Yavlinskii said.
Khodorkovskii, in the past, has not been shy about his political sympathies, but has stopped short of criticizing President Vladimir Putin directly.
After a hurriedly assembled meeting yesterday, the influential Union of Industrialists and Entrepreneurs, representing Russias business elite, issued a general condemnation of the arrest. The lobbying group also appealed to Putin.
One member, Anatolii Chubais, warned that the situation would become a threat to the Russian investment climate.
Shadrin tried to downplay the impact the arrest would have on Yukoss business prospects.
"I don't think it will have any consequences on Yukos's activities since Yukos has a strong team of professionals who will go on working each in their department according to business as usual," Shadrin said. "So we confirm that we will fulfill all our obligations towards our partners, our shareholders and society as a whole, since we provide fuel to a significant number of Russian regions."
During the Yukos saga, the price of the companys shares has bobbed up and down according to developments in the prosecutor's office.
Yukos is also said to be in the process of having talks with international oil majors ExxonMobil and ChevronTexaco for the sale of a stake. Neither commented on the latest developments.