Russian Tycoon Khodorkovsky to Face Trial June 16

The crisis around Russian oil major YUKOS appeared to head for a showdown Tuesday, after a Moscow court set a date for main shareholder Mikhail Khodorkovsky's trial on tax evasion and fraud charges.



A closed pre-trial hearing of the Meshchansky district court ruled Khodorkovsky would stand trial on June 16, his lawyer said, together with fellow YUKOS owner and close business associate Platon Lebedev.


"The court made the sensible decision to approve our motion (to unite the two cases), because Lebedev and Khodorkovsky face the same charges," Khodorkovsky's lawyer Genrikh Padva said.


It will be the highest-profile trial of a public figure since the fall of the Soviet Union in 1991. Khodorkovsky has been held in pretrial detention since his arrest in October.


The downfall of Khodorkovsky, the most prominent of Russia's fabulously rich oligarchs, is believed to have been engineered by the Kremlin who feared he was using formidable financial muscle to challenge its authority.


His arrest caused a run on Russian stocks and became a cause celebre for activists who complain Russian President Vladimir Putin (news - web sites)'s style of leadership is iron-fisted and authoritarian.


The affair has taken a heavy toll on YUKOS, which faces a $3.4 billion bill for back taxes and is trading at a fraction of its value at the time of Khodorkovsky's surprise arrest.


Company executives say the company could be driven out of business if it faces any fresh bills for back taxes from the authorities. YUKOS is fighting the tax bill through the courts.


HOPES OF COMPROMISE FADE


Most Russians appear to have little sympathy for Khodorkovsky's woes.


The vast majority missed out on a bonanza in the 1990s when Khodorkovsky and other fleet-footed businessmen and financiers made fortunes in a murky sell-off of state assets.


Some civil rights activists believe the court case will be little more than a show trial. Hopes of an out of court settlement between Khodorkovsky and the authorities have all but vanished.


"I see no appetite for a compromise on either side," said a prominent international banker.


Khodorkovsky faces up to ten years in a labor camp if convicted.


Analysts said the fact Khodorkovsky and Lebedev would face trial together was a small victory for the defense.


"That's positive -- they asked for the cases to be judged together and they got that," said Kaha Kiknavelidze, an analyst at Troika Dialog in Moscow. "It means they won't give testimony against each other."


At 10:15 a.m., YUKOS shares were trading 3.4 percent higher at $8.20 on Moscow's RTS exchange, outperforming the broader RTS index. Its locally-denominated stock was up 2.16 percent at 237 rubles on the MICEX exchange.

Lebedev's arrest last July on charges of fraud and tax evasion was the first sign of major problems for shareholders in YUKOS -- a firm that has in recent years become a symbol of the resurgence under private ownership of Russia's oil industry.

Of YUKOS's six core shareholders, Khodorkovsky and Lebedev face trial, one other has already been convicted and three have fled the country.

Before a failed merger with smaller rival Sibneft last year, Khodorkovsky owned 26.9 percent of YUKOS through a special trust fund and a further 5.1 percent directly. Lebedev owned 3.8 percent of the company.


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