Russia's richest man on trial charged with fraud, tax evasion

Confined in a metal cage, former Yukos oil company CEO Mikhail Khodorkovsky exchanged glances and sometimes a comforting smile with his elderly parents, Marina and Boris. He also chatted warmly with co-defendant Platon Lebedev inside the cage in Meschchansky district court.

"Everything is OK, you can see for yourselves," Khodorkovsky told Associated Press Television through the bars. Speaking of Lebedev, he said: "We haven't seen each other for almost a year. Now we have a chance to talk - about everything, but mostly our families."

The trial of the two billionaires, largely in connection with the 1994 privatization of a big, state-owned fertilizer plant, will delve into the murky privatization process that accompanied the dismantling of this ex-Communist state. Both could face about a decade in prison if convicted.

The company that made them their fortune, Yukos, is reeling from its own legal troubles. Facing a $3.4-billion tax claim it says it can't pay up front, the company has warned it might be driven into bankruptcy.

Yukos' stock price tumbled eight per cent Tuesday as investors panicked on news that Yukos managers were trying to strike a deal with the government on paying off the tax claim if it is ruled legal in a court hearing Friday. Yukos shares fell a further 5.4 per cent by mid-day on Wednesday.

"I am expecting nothing more than I've seen in the past," Robert Amsterdam, Khodorkovsky's Toronto-based lawyer, said outside court. "This is a country that destroys its finest company while its senior members languish in jail illegally."

Journalists massed outside, alongside a group of young Yukos supporters wearing red T-shirts with Khodorkovsky's portrait on the back. Only a handful of reporters were allowed into the proceedings, which were held in a small, poorly ventilated courtroom. At one point, a recess was called because the room was too hot and stuffy.

Khodorkovsky appeared calm throughout the proceedings; Lebedev was more impatient and emotional.

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