Friends of Khodorkovsky ready to pay income tax claim

MOSCOW (AFP) - Business partners and friends of Mikhail Khodorkovsky, the jailed founder of the Russian oil group Yukos, are prepared to pay back taxes which the state claims he owes, Khordorkovsky said.

"My lawyers informed me today that my friends have decided to pay the sums that correspond to my fiscal debt, as well as those of (another partner) Platon Lebedev," Khodorkovsky said at the Moscow court where his trial is nearing an end.

The sums amounts to around 54 million rubles (two million dollars).

"I demand that the court not consider this payment as recognition of my guilt or truth of the complaint by fiscal bodies," the Yukos founder stressed.

His statement was confirmed by partners in the Menatep holding group who have sought refuge in Israel -- Leonid Nevzlin, Mikhail Brudno and Vladimir Dubov -- in a statement on the Internet site of Khodorkovsky's press center.

"We are prepared to pay what Khodorkovsky and Lebedev owe in income tax under the civil action brought against them," Nevzlin said in the statement.

"Although Khodorkovsky and Lebedev have not admitted their guilt and their guilt has not been proven on any counts, we are prepared to do everything in our power to minimize the state's claims," Nevzlin added.

Khodorkovsky, once the richest man in Russia, was arrested in October 2003 and charged with tax evasion, massive fraud and money laundering.

He faces up to 20 years in jail.

Lebedev, another top Yukos official, is being tried separately.

The Russian tax authorities are also claiming more than 27 billion dollars (20.8 billion euros) in unpaid taxes by Yukos.

Yukos's main asset Yuganskneftegaz went to state-run Rosneft in a controversial government auction for less that 10 billion dollars (7.72 billion euros) in October.

Yugansk alone produces as much oil as the US state of Texas, and accounted for more than 60 percent of Yukos's sales.

Many observers regard the charges against Khodorkovsky as a Kremlin-driven vendetta in retaliation for his well-financed foray into politics in opposition to President Vladimir Putin.

The Yukos founder also clashed with the state over its control of lucrative export pipelines.

(From AFP via Yahoo!)

No Mercy in Court

The jury of the Moscow City’s Court brought in a verdict of guilty against Alexey Pichugin, former employee at the YUKOS security service. Pichugin was found guilty in having masterminded murder and attempted murder, with no recommendation to mercy, and may face imprisonment up to the life sentence. However the mercy was recommended for the second figurant, Tambov businessman Alexey Peshkun, who had admitted part of his guilt.


Like the whole process, the decisive hearing was held behind closed doors. Not only the media, but also relatives of the accused, including Pichugin’s mother Alla Pichugina, were unable to wriggle the way into the court room.

In two hours and a half after the hearing commenced, the lawyers came out to say they spent all that time endeavoring to adjust the census paper offered to the jury by judge Natalia Olikhver. According to lawyer Georgy Kaganer, there were 18 questions, many of them made out in clear violation of the Criminal Code. For instance, in the No. 15 question, which accuses Pichugin in having arranged the murder of Tambov-residents Sergey and Olga Gorins in 2002, it is specified that the crime was committed by unknown persons, the Gorins’ sun Dmitry suffered severe physical injury, the Gorins were murdered by the unknown persons, their corpses were buried in the middle of nowhere. The lawyers say the aim of such wording is to embarrass the jury, to prevent it from making a sentence of acquittal. Besides, the lawyers pressed for crossing out the reference to Pichugin’s employment at YUKOS, as it could affect the opinion of the jury and offered other adjustments. But despite two and a half hours of heated debate, none of the proposals put forward by the defense was sustained. It took eight minutes of discussion so that Olikhver was able to say nay to all appeals. Then, she spent two hours in reading the summing-up, which closely resembled a bill of indictment. In particular, Olikhver quoted testimony of the previously sentenced members of the Tambov Group, who acted as witnesses in the Pichugin’s case (the investigators claim the Group actually committed offense arranged by YUKOS employees). The summing-up ended by the judge’s request to the jury to neglect contradictions between the testimony made in the court and in the course of investigation.

The jury’s sentence was announced only at around 9:30 p.m. The majority (eight vs. four votes) determined the guilt of Pichugin under all criminal charges and recommended no mercy. Therefore, judge Olikhver may give a life sentence to Pichugin. Pichugin’s mate Alexey Peshkun might count on mercy in the case of attempted murder of Olga Kostina, former aid to Khodorkovsky. However, the term of the sentence for other crimes will be long.

The verdicts under Pichugin and Peshkun cases are expected today.

(From Kommersant, 3.24.2005)

Khodorkovsky, Lebedev Call Civil Suits Against Them Extortion

The former head of the Yukos oil company Mikhail Khodorkovsky and former head of the Menatep group Platon Lebedev have called the civil suits against them “extortion”.

Speaking at the Meshchansky court on the lawsuits filed by tax authorities, Khodorkovsky said, “they know that the money has already been paid by bills, then they were paid by the decision of the Arbitration Court, and now they are demanding money for the third and fourth time. This is called extortion.”

Khodorkovsky pleaded not guilty to all the charges and said he rejected the claim from the tax authorities. As for the lawsuit filed by a tax inspector against him personally, he said “the law envisaged exactly what I paid,” RosBusinessConsulting news agency quoted reported.

Lebedev said all the charges against him are “falsified by the prosecution and tax officials”. He said he will file counterclaims against the Tax Ministry if he gets the chance.

Earlier, tax officials said in court that they want to increase the number of civil suits against Khodorkovsky and Lebedev due to fines that appeared while the defendants were in custody.

Khodorkovsky’s term of detention was recently extended till July 14.

HERE

Putin May Repair Yukos Damage With Asset-Sale Amnesty

Russian President Vladimir Putin, seeking to restore investor confidence after tax demands brought down OAO Yukos Oil Co., by ending the government's ability to reverse the state asset sales of the 1990s.

Russia may ``remove the threat of property redistribution'' by cutting the statute of limitations on reviewing asset sales to three years from 10, Putin said today at a meeting in the Kremlin with 24 of the country's wealthiest businessmen. That may reassure Russia's industrialists, many of whom made their fortunes buying state assets cheaply after the Soviet Union collapsed in 1991.

Russia's RTS stock index jumped 2.4 percent, its biggest gain this year. The benchmark in 2004 had its worst year since 2000 as the jailing of Yukos's biggest owner, Mikhail Khodorkovsky, helped prompt a $7.8 billion capital outflow.

``This news, if it's retroactive, is what investors have been awaiting for a long, long time,'' said Jean-Louis Tauvy, who manages $200 million in Russian assets at Atria Advisors Ltd. in Moscow. ``There was a fear factor created by Yukos and now the probability this case was a one-off is pretty high.''

Shares Advance

The Moscow Interbank Currency Exchange Index added 4.1 percent to 597.00 at 5:48 p.m. local time, with all 18 shares rising, making it the biggest gainer among 60 national stock indexes Bloomberg monitors. Both the RTS and Micex lost 1.8 percent yesterday.

``We're making this proposal to stabilize property rights and to remove the threat of property redistribution,'' Putin said. ``I hope that will bring a long awaited calm to the business class by guaranteeing property rights.''

``The road to any further Yukos-style expropriations is looking reassuringly blocked,'' Christopher Granville, a strategist at Moscow-based United Financial Group, said in a note to clients.

Putin met with 24 businessmen, including Oleg Deripaska, Russia's fourth-richest man and the owner of OAO Russian Aluminum, the world's third-biggest aluminum producer, Alfa Bank Chairman Mikhail Fridman and Vladimir Potanin, the co-owner of OAO GMK Norilsk Nickel, the world's biggest nickel miner.

Improved Investment Climate

``This is a significant step on the road to strengthening property rights,'' Potanin said after the meeting. ``This leads not only to the improvement of the investment climate but also to the improvement of the social situation. The results of the meeting were encouraging.''

Russian Economy Minister German Gref told Putin on March 22 that slowing investment growth will have ``the most negative'' influence on the country's economy this year. Investments in Russia's industries rose 7.8 percent in February from the same month a year ago, compared with a 13.2 percent annual increase in February 2004.

Yukos founder and former Chief Executive Khodorkovsky, 41, has been jailed for the past 16 months on fraud and tax evasion charges, allegations he says are retribution for his support of political opposition to Putin. Yukos shares have plunged 96 percent since Oct. 25, 2003, when Khodorkovsky was arrested in Siberia and jailed in Moscow.

Russia in December seized Yukos's largest unit OAO Yuganskneftegaz, later bought by state-owned oil company OAO Rosneft, to cover part of tax bill of $28 billion, including claims against subsidiaries.

Yukos, Russia's largest oil exporter last year, won't ship any crude abroad in the second quarter of 2005, Interfax reported today, citing Yukos Deputy Chief Executive Alexander Temerko.

Yugansk will be split off from Rosneft to allow OAO Gazprom, Russia's state-owned gas company, to buy Rosneft, Gazprom Chief Executive Alexei Miller said this month.

Putin Consolidates

Putin, 52, is consolidating the government's energy interests in Gazprom. The government also plans to let only local companies bid for the largest oil, gas and metal fields, the Natural Resources Ministry said on Feb. 10.

The government should create a stable, predictable environment for business and guarantee property rights, Putin said. It also should help large companies develop internationally and create easier conditions for start-up companies, Putin said.

``We are preparing proposals for clearer regulation of tax procedures,'' Putin told businessmen today.

Oil Boom Slows

Russia's five-year oil boom may be ending as Putin increases government control over the industry, hurting investment in new wells, rigs and pipelines. Output will rise 3.8 percent this year, less than half the average rate during the past five years and the lowest since $10 oil hurt investment in 1999, the Paris-based International Energy Agency estimates.

Exxon Mobil Corp., the world's largest publicly traded oil company, in 2003 held talks to acquire a stake in Yukos, which then was the largest producer of Russian oil. Exxon Mobil Chairman Lee R. Raymond in December said he was wary of making large, new investments in Russia because of the Yukos crackdown.

Russia last year canceled the rights of Exxon Mobil, based in Irving, Texas, and San Ramon, California-based ChevronTexaco Corp. to the Sakhalin-3 oil fields in the Pacific Ocean, with an estimated 4.1 billion barrels of oil reserves, more than Russia's annual output. The fields also hold 1.5 trillion cubic meters of gas reserves, enough to fuel the U.S. for more than two years.

HERE

Yukos security officer is guilty on all counts -prosecution

MOSCOW. March 23 (Interfax) - The prosecution has asked a court to find former Yukos security officer Alexei Pichugin guilty on all counts.

The former chief of the 9th section of Yukos's economic security division, Pichugin is charged with organizing an assassination attempt on Olga Kostina, the former public relations chief for the Moscow mayor's office and a former adviser for Mikhail Khodorkovsky, as well as the assassination attempt on Viktor Kolesov, the former property manager at Rosprom.

The defendant's lawyer Georgy Kaganer told Interfax on Wednesday that during the case the prosecution asked the court to find Pichugin guilty on all three counts of the indictment, arguing that his guilt was proven by witness testimony.

HERE

Spain 'cracks $300m money racket'

Police in Spain say they have smashed a massive international money-laundering ring centred on the southern coastal resort of Marbella.

Forty-one people of at least five nationalities were arrested.

The group is suspected of laundering more than $300m (£155m) for gangs involved in murder, drug trafficking, arms dealing and prostitution.

Spanish authorities said they suspected some of the cash was illegally siphoned from Russian oil company Yukos.

A spokesman for Yukos has denied any involvement in money-laundering.

Yukos defiant

A boat, two planes and more than 40 luxury cars were also seized in the raid which went ahead after 10 months of investigation, officials said.

Spanish, French, Finnish, Russian and Ukrainian nationals were among those arrested.

The Spanish interior ministry described it as its biggest investigation.

Large sums are thought to have been diverted from Yukos to a Dutch company and then to one of its Spanish branches, the ministry said.

The Russian oil giant has been under investigation by Russian authorities seeking the repayment of $28bn (£15bn) in alleged unpaid taxes.

The company's founder, Mikhail Khordokovsky, has been in jail since October 2003 and faces separate fraud and tax evasion charges.

Company spokesman Alexander Shadrin denied all wrongdoing in an interview with Moscow Radio, Russia's Interfax news agency reported.

"The only place left to look is on Mars - did we launder something there?" he said.

Spain's Costa del Sol, a coastal strip including Marbella and the city of Malaga, has long played host to a number of international criminal gangs, earning the nickname "Costa del Crime".

Article Source

Jailed Yukos Lawyer Goes on Hunger-Strike

The deputy general counsel of Yukos oil company Svetlana Bakhmina, arrested on Dec. 7, has gone on hunger-strike, Newsru.com reported on Thursday. According to her lawyer, Olga Kozyreva, Bakhmina has gone without food since March 3 after the prosecutor prohibited telephone calls to her children

“This is my client’s own decision, based on the fact that she is not allowed to associate with her children. But this doesn’t mean she won’t collaborate with the investigators,” Kozyreva stressed.

According to Russian law, prisoners have to write a special application to obtain a permit to make phone calls to relatives. Officials refused to sign her application, saying that it was drawn up incorrectly.

Moreover, the Moscow City Court on Wednesday upheld the decision of Moscow’s Basmanny Court to extend the period of custody for the former Yukos employee until May 2. Bakhmina has already spent three months in prison.

Bakhmina is a prime suspect in the case of theft of Tomskneft VNK property worth around eight billion rubles ($300 million). Earlier, the Prosecutor General’s Office charged the head of Yukos’ legal department Dmitry Gololob with misappropriation and squandering of property within the framework of the same case.

Gololob and his deputy, Kirill Glukhovsky, left Russia, claiming that their freedom, health and even life had been threatened by the Prosecutor General’s Office.


FromMosNews, 3.10.2005

Jailed Yukos Lawyer Enters Second Week of Hunger Strike

[Europe News]: MOSCOW - What began as a routine questioning by Russian prosecutors in early December over a 6-year-old asset-stripping case has turned into an ordeal for Yukos lawyer Svetlana Bakhmina, 35, who has remained in pretrial detention in a four-woman cell ever since. On Friday, Bakhmina entered her second week of a hunger strike - a last-ditch attempt to win the right to speak by telephone with her two young sons.

The case, seen as one of the darkest corners of the authorities' complex legal web against the managers presiding over the remains of the Yukos oil empire, has attracted considerable attention, not least thanks to a broad public relations campaign organized by the company.

International lawyers' organizations, including the Association of the Bar of the City of New York and the Council of the Bars and Law Societies of the European Union, have written to President Vladimir Putin and Russia's Prosecutor General's office demanding that Bakhmina be released from prison on house arrest.

In a rare front-page editorial Friday, the respected Vedomosti business daily suggested prosecutors are using Stalinist methods in Bakhmina's case, which was being conducted in the "best traditions of the Lubyanka in the 1930s" - a reference to the KGB's dour headquarters in downtown Moscow.

"Do the prosecutors think that Bakhmina's children can also interfere with the investigation, intimidate witnesses or destroy the evidence of their mother's guilt?" the paper wrote.

Bakhmina's ordeal began on December 8 when she was called in for questioning by Moscow prosecutors who claim she played a role in stripping some $650 million in assets from the Yukos oil company's Tomskneft subsidiary in 1997. Bakhmina has consistently denied the charges, and her lawyers stress that she was a junior lawyer of 28 at the time, recently returned from maternity leave and with little authority.

Bakhmina's lawyers say their client passed out during her interrogation. After briefly being taken to a hospital she was moved to an Interior Ministry building where her questioning continued, without her lawyer. At one point during the interrogation, she was allowed to sleep - watched over by four of her male interviewers. Later she collapsed a second time.

"Her physical state is bad. She only drinks water," said Olga Kozyreva, Bakhmina's Moscow-based lawyer who visited her Thursday at women's' prison No. 6 in southern Moscow.

"She has gone three months without talking to her children. As a mother this is terribly demeaning," Kozyreva said.

After her arrest, Bakhmina asked investigators to be allowed to make paid telephone calls to her two sons - Fyodor, 3 and Grigory, 7.

Her investigators initially agreed to the request, then swiftly rejected it on the grounds that the paperwork had been wrongly stamped. Bakhmina's lawyers corrected the document together with prison officials and resubmitted it, but investigators rejected her request on March 3, after which Bakhmina announced her hunger strike.

"She has the right to choose this form of protest, but as far as the decision of the investigators is concerned ... investigators cannot act on a whim, they act in strict accordance with the criminal and procedural code," Viktor Potapov, a spokesman for the Prosecutor General's office said Friday. "But of course, if those who are detained are not allowed to talk by telephone this causes certain inconveniences."

Peter Binning, a partner with the Corker Binning law firm who represents Bakhmina outside Russia, noted that his client's arrest had coincided with a period of frantic activity as Yukos' lawyers rushed to put together an anti-crisis plan to stave off seemingly imminent bankruptcy.

In a case observers say is the Kremlin's punishment for jailed Yukos founder Mikhail Khodorkvosky's political ambitions, the company saw its biggest unit -Yuganskneftegaz - sold off at a disputed auction on Dec. 19 to pay just over a third of the $28 billion authorities say it owes in back tax claims.

Continued pressure on the company and the expanding cases targeting Yukos lawyers and managers have raised the prospect that the company's other units - Tomskneft and Samaraneftegaz - could be sold off to Kremlin-friendly companies. Oleg Vitka, the general director of Yukos' Siberian Zapadno-Malobalykskoe joint venture with Hungarian MOL, was detained by prosecutors Thursday for alleged licensing violations.

Binning also drew attention to a December report in the business daily Kommersant that cited unidentified investigators as saying Bakhmina would be released if Yukos' top in-house lawyer, Dmitry Gololobov, who is wanted in connection with the same asset-stripping case, returns from London where he has been working since fall.

"It appears that the Russian authorities are happy to trade one human being's life for another and are effectively holding Svetlana Bakhmina hostage until her superior in the legal department, Gololobov, returns to Russia," Bakhmina's London-based public relations team said earlier in the week.

From Keralanext.com, 3.11.2005

Jail Sentences Demanded

The prosecution


State prosecutor Dmitry Shokhin of the Prosecutor General's Office asked the court yesterday to sentence Mikhail Khodorkovsky and Platon Lebedev to ten years in a minimum security prison. During yesterday's presentations in the Meshchansky District Court in Moscow, the prosecutor analyzed the evidence of their guilt and concluded they were guilty of all crimes imputed to them. However, in the main episode of the case – the acquisition of 20 percent of the shares in OAO Apatit – the prosecutor moved that the accused be exempted from punishment owing to the expiration of the statute of limitations.


The analysis of the evidence did not come easily to prosecutor Dmitry Shokhin, in contrast to a reading of the verdict on the first day of presentations [see yesterday's edition of Kommersant]. He kept looking up from the prepared text and, staring off into the distance, chose his words carefully.

“The uniformity of the fraud committed with the shares of OAO Apatit and the Research Institute of Fertilizers and Insectofungicides engages our attention,” the prosecutor explained. “In both cases, Bank MENATEP president Lebedev signed guarantees for dummy firms on whose behalf the shares of these companies were purchased. Meanwhile, as the accused Khodorkovsky explained, Lebedev did not undertake any actions behind his back.”

“This is crazy,” came a loud whisper from Khodorkovsky's father, Boris Moiseevich, who had come together with Khodorkovsky's mother, Marina Filippovna. Shokhin continued.

“In both cases, employees of Khodorkovsky and Lebedev, posing as managers of the dummy companies, were used in the fraud.”

According to the prosecutor, embezzlement by means of fraud committed with shares of Apatit and Research Institute of Fertilizers and Insectofungicides was planned in MENATEP's investment department. In the prosecutor's opinion, the primary evidence of the accused Khodorkovsky and Lebedev's specific complicity in these crimes is Bank MENATEP's charter, which states that the granting of guarantee responsibility to firms is the competence of the board of directors of this financial institution.

“The chairman of Bank MENATEP's board of directors at that time was Khodorkovsky, and Lebedev was a board member!” the prosecutor intoned solemnly. “Khodorkovsky's position on Bank MENATEP's universalism and near-altruism was spurious from the start. The shares of the privatized companies acquired by the dummy companies were subsequently deposited with the bank.”

“They'll give ten years,” Boris Khodorkovsky whispered; his wife was crying.

Meanwhile, Shokhin proceeded to the episode of YUKOS's tax evasion through dummy companies registered in the special low-tax zone of Lesnoi in Sverdlov Region. This was one of the most difficult moments for the prosecutor. The fact is that, under the law, the manager of a company having the right of first signature on financial documents, as well as the chief accountant, must bear responsibility for such a crime. In his testimony in court, Khodorkovsky said that at the time the alleged criminal acts were committed (1999-2001), he was only a shareholder of the oil company and did not hold any management positions in it. The prosecutor's response was terse.

“The case materials contain documents stating that Khodorkovsky and Lebedev were the principal owners of YUKOS's shares. As a result, they were in fact managers of the oil company.”

Shokhin claimed that Business Oil, Vald Oil, Forest Oil, and Mitra, companies registered in Lesnoi through which, according to the documents, YUKOS sold oil for export, were controlled by Khodorkovsky and Lebedev.

As evidence of this, the prosecutor read a list of internal telephone numbers of YUKOS's Moscow office. The list had been obtained from a server seized by the Prosecutor General's Office in a business center in the village of Zhukovka from an office with a paper sign on the door reading “State Duma Deputy Vladimir Dubov”. The list contained the four-digit telephone numbers of the directors of these companies.

As further evidence of the connection to YUKOS of these four directors of the dummy firms (they are currently under investigation), the prosecutor named a statement of a certain witness Mustafin that these people provided OOO YUKOS Moscow's security department with transcripts of their interrogations at the prosecutor's office.

Then Shokhin paused at the illegal activities of “Khodorkovsky and Lebedev's organized group” involving tax payments with bills in 1999, when this was prohibited under the Tax Code. In this episode, the Moscow Arbitration Court rendered invaluable assistance to the prosecution when it found that YUKOS had “intentionally created the appearance that the companies registered in the special low-tax zone had made a profit for the purposes of tax evasion.” The prosecutor quoted in great detail from the court's decision, which had been added to the criminal case materials.

Proceeding to the episode of tax evasion by the accused as private individuals through two offshore companies on the Isle of Man, the prosecutor produced two contradictory pieces of evidence. In a letter to Lebedev from the issuer of the Visa Gold card, Lebedev was referred to as the head of one of these offshore firms, Status Services Ltd. But in an official document from the Isle of Man, also attached to the case materials, Englishman Philipp Benen is mentioned as the head of Status Services Ltd. However, according to Shokhin, both these documents confirm that the said offshore company with charter capital of “all of two thousand pounds sterling” could not have requested, and paid generously for, the advice of Khodorkovsky, Lebedev, Nevzlin, Brudno, Shakhnovsky, and Kazakov.

The prosecutor finally came to the main point – the question of punishment for the accused.

“Khodorkovsky and Lebedev played an organizing role in the perpetration of the crimes, without the least sign of remorse, and made repeated attempts to pressure witnesses and even judges. And Lebedev repeatedly made insulting remarks to the prosecutor.”

All of this, in the prosecutor's opinion, showed that the accused could not be reformed while at liberty. He asked the court to pronounce both accused guilty of fraud involving the shares of Apatit and to sentence them to nine years each in prison, but to exempt them from punishment as a result of the expiration of the statute of limitations. For the remaining crimes, i.e., fraud, failure to execute two court decisions, nonpayment of taxes, embezzlement, and forgery of documents, Khodorkovsky and Lebedev deserved ten years each in a minimum-security facility by means of partial addition of terms (full addition gave 65.5 and 47.5 years, respectively). For the third accused, Andrey Krainov, a former employee of MFO MENATEP, who had “partially repented”, the prosecutor asked for a sentence of five years and six months conditionally for fraud and failure to execute a court decision.

“I was prepared for this,” Khodorkovsky said and smiled politely.

The escorts did not allow Platon Lebedev, standing next to him, to compare notes with others in the court, who were shoved back from the cage.

Representatives of the Federal Tax Service and a civil suit in the case will present their arguments tomorrow, after which a date for the lawyers' presentations will be set.

Ekaterina Zapodinskaia

(From Kommersant, 3.30.2005)