Russia's richest man faces jail and loss of oil empire

Just months since he was hauled into jail, Russia's richest man Mikhail Khodorkovsky faces a lengthy prison sentence and the loss of his oil empire, widely seen as punishment for his defiance of the Kremlin.

Accused of defrauding the state of a billion dollars, the ex-boss of the biggest Russian oil company Yukos appeared in court briefly in Moscow on Friday to have his trial adjourned until June 8.


With Yukos warning of bankruptcy because of demands by Russia's tax ministry that it pay 3.5 billion dollars in back taxes, observers expect a speedy conclusion to one of the top political dramas of President Vladimir Putin's rule.


The 41-year-old billionaire tycoon, who could face 10 years or more in prison and confiscation of assets, denies the charges but has no illusions about his fate, one of his lawyers told AFP.


"He is realistic. He understood that when he didn't leave the country before his arrest. Now that he is sitting in jail he understands that he could receive a lengthy sentence," attorney Anton Drel said.


Khodorkovsky was detained on October 25, when armed police stormed his private jet during a stopover in Siberia, and flown to Moscow to be jailed pending his trial on charges of massive fraud and tax evasion.


Any one of the other dozen or so oligarchs who amassed their billions during controversial privatisations in the tumultuous post-Soviet years in the early 1990s could be pursued on similar charges, according to observers.


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


Powerful elements in the Kremlin from the security services are also believed to be determined for the state to wrest control of the strategic energy sector by expropriating Russia's most successful oil company.


"There is no hope for Khodorkovsky. He will be convicted and jailed, to the maximum degree," said Yury Korgunyuk, an analyst from the INDEM think-tank.


Although a blot on Putin's already tarnished democratic record, the removal of this troublesome opponent was essential for the Russian leader to press on in his second term which he won overwhemingly in March, commentators note.


"Putin is concerned by Western criticism, it is not pleasant for him. But if he has to choose between jailing Khodorkovsky and pleasing the West, then his choice is clear," said Korgunyuk.


Khodorkovsky, whose fortune was estimated this year by Forbes magazine at 15.2 billion dollars, is the largest shareholder in Yukos.


He and his associates, including number three shareholder billionaire Platon Lebedev who is also on trial for fraud and tax evasion, control 42 percent of the oil producer through an offshore holding company, Group Menatep.


As pessimism deepened about the future of the best-managed blue-chip company in Russia, Yukos has had billions wiped off its share price, which plunged 20 percent in the last two days of trading.


"Under the best-case scenario, Menatep's shareholders sooner or later will break down and cooperate with the government, offering up their stake in Yukos in exchange for reduced sentences," said Adam Landes, an analyst from Renaissance Capital brokerage in Moscow.


Christopher Weafer, an analyst at Alfa Bank, also sees Khodorkovsky's downfall as inevitable.

"The controlling stake will be taken from Menatep and placed into some 'interim holding' under government control. In one or several years that stake may be used formally to create a giant state oil company," he said.




HERE