Khodorkovsky goes on trial amid Yukos bankruptcy threat

Mikhail Khodorkovsky goes on trial in the key case of the Yukos affair, which toppled Russia's richest man from the heights of power and left the nation's largest oil producer teetering on the brink of bankruptcy.

Khodorkovsky is standing trial with one of his top associates, Platon Lebedev, whose arrest last July brought into the open the investigation widely seen here as a political witch-hunt.


The first day of their joint trial is due to begin at 11:00 am (0700 GMT) at a Moscow court. The proceedings are expected to last several months.


The two key Yukos shareholders face charges of fraud, tax evasion and embezzlement and stand accused of defrauding the state of more than one billion dollars through their business dealings.


The defendants, both of whom have denied wrongdoing, face up to 10 years in prison if found guilty.


The investigation into the oil giant Yukos and its key shareholders was launched last summer and is widely seen here as Kremlin payback for Khodorkovsky's political ambitions, though Russian President Vladimir Putin (news - web sites) has angrily lashed out at such speculation.


Having turned Yukos into one of Russia's most transparent and business-friendly companies, Khodorkovsky, 41, was detained at gunpoint on October 25 when masked security service agents stormed his private jet during a stopover in Siberia and flew him to Moscow where he has since been in custody.


Khodorkovsky's supporters say he was targeted because he had spent part of his fortune financing opposition parties ahead of last December's parliamentary election -- as a lesson to Russia's super-rich tycoons to keep out of politics.


They say that any one of the other dozen or so oligarchs who amassed their billions during controversial privatizations in the tumultuous post-Soviet years in the early 1990s could be pursued on similar charges.


Khodorkovsky's wealth was estimated this year by Forbes magazine at 15.2 billion dollars.


The investigation has left Yukos, once an investor darling, facing the real threat of bankruptcy, with the tax ministry demanding it pay 99 billion rubles (3.5 billion dollars, 2.9 billion euros) in unpaid taxes for 2000, as well as extra fines and interest.


Yukos has warned that it cannot pay the bill because of a freeze imposed on its assets after Khodorkovsky's arrest. Shares in the oil giant have plunged to their lowest levels in months.


HERE