Impact of Arrest
Initially news of Khodorkovsky's arrest had a significant effect on the share price of Yukos. The Moscow stock market was closed for the first time ever for an hour in order to assure stable trading as prices collapsed. Russia's currency, the ruble, was also hit as some foreign investors questioned the stability of the Russian market. Media reaction in Moscow was almost universally negative in blanket coverage, some of the more enthusiastic pro-business press discussed the end of capitalism, while even the government-owned press criticised the "absurd" method of Khodorkovsky's arrest.
Yukos moved quickly to replace Khodorkovsky with Russian born U.S. citizen Simon Kukes. Simon Kukes, who became the CEO of Yukos, was already an experienced oil executive.
The U.S. State Department said the arrest "raised a number of concerns over the arbitrary use of the judicial system" and was likely to be very damaging to foreign investment in Russia, as it appeared there were "selective" prosecutions occurring against Yukos officials but not against others.
A week after the arrest, the Prosecutor-General froze Khodorkovsky's shares in Yukos to prevent Khodorkovsky from selling his shares although he retains all the shares' voting rights and receives dividends.
Khodorkovsky's arrest alarmed foreign investors and policymakers alike.
In 2003 Khodorkovsky's shares in Yukos passed to Jacob Rothschild under a deal they concluded prior to Khodorkovsky's arrest.
Read more about this topic: Mikhail Khodorkovsky
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