Mikhail Khodorkovsky - Prosecution

Prosecution

In early July 2003, Platon Lebedev, a Khodorkovsky partner and second largest shareholder in Yukos, was arrested on suspicion of illegally acquiring a stake in a state-owned fertilizer firm, Apatit, in 1994. The arrest was followed by investigations into taxation returns filed by Yukos, and a delay to the antitrust commission's approval for its merger with Sibneft.

Khodorkovsky was himself arrested in October 2003, charged with fraud and tax evasion. The Russian Prosecutor General's Office claims Khodorkovsky and his associates cost the state more than $1 billion in lost revenues.

Subsequent to Khodorkovsky's arrest, Leonid Nevzlin gained a controlling stake in Yukos when Khodorkovsky handed him a 60% share in the holding company that controlled the firm. Nevzlin is himself now wanted in Russia and has since fled to Israel.

On 31 March 2009, a new trial of Khodorkovsky and Lebedev began in Moscow on fresh charges of embezzlement and money laundering. The two men face up to 22 more years in prison. Khodorkovsky refused to enter a plea, claiming that he did not understand the charges.

According to the sentence in the second trial, the companies that extracted oil (such as Yuganskneftegaz and Tomskneft, in which Yukos held major stake, but did not have 100% ownership), would sell all their oil to different shell companies below market rates, and the shell companies would re-sell it to the eventual buyer at market rates. Shell companies, unlike oil-extracting companies, would be owned 100% by Khodorkovsky, Lebedev et al. Those shell companies had very few employees, conducted no other activity than reselling the oil, and some of them had offices in office buildings owned by Yukos. As a result, Khodorkovsky and Lebedev were convicted of embezzlement from the oil companies and some of the oil companies' minority shareholders acted as witnesses for the prosecution during the trial.

In May 2010, Mikhail Kasyanov, who became an opposition figure after serving as Putin's prime minister from 2000 to 2004, told the court that Putin, while president, had been angered by Khodorkovsky's support of the Communist Party together with liberal Yabloko and the Union of Right Forces.