Mikhail Khodorkovsky, the jailed former head of Yukos Oil Co., faces more prison under a new conviction for embezzlement of 29 billion U.S. dollars of crude oil, a verdict that the governments in the U.S. and Europe said the law weakened in Russia .
Khodorkovsky and his former business partner, Platon Lebedev, already serving eight years for fraud and tax evasion penalties under a 2005 conviction may be sentenced this week or after January 10, when Russia New Year holidays end, their lawyers said. The men face six years in prison, the defense team said.
“The process was a charade of Justice, the cost was absolutely false, but I fear the verdict will be very real,” Vadim Klyuvgant, the lead lawyer, said yesterday in a statement. The defense team plans to challenge the decision, he told reporters outside the courtroom. “There is no doubt that there was pressure on the court.”
Khodorkovsky, 47, was due for release in October 2011. Once the richest man in Russia, he called the charges retaliation for the political opposition to Prime Minister Vladimir Putin, who was president at the time of his arrest in 2003. During the presidency of Putin, Yukos, once Russia’s largest company by market value, was declared insolvent by approximately $ 30 billion in tax claims and sold in pieces. Putin has denied any involvement.
Environment for business
American, German and British officials said that the process undermines confidence in Russia’s commitment to a fair environment for business.
The case “serious questions about selective prosecution calls – and the rule of law is overshadowed by political considerations,” U.S. Secretary of State Hillary Clinton said in a statement yesterday. The U.S. will monitor the case and others who “have a negative impact on the reputation of Russia to respect its international human rights obligations and improve its investment climate.”
The European Union said that the proceedings following “very closely.”
“The conditions of the process are extremely worrying and a step back on the road to modernization of the country,” German Foreign Minister Guido Westerwelle said in a statement.
Richard Ottaway, Chairman of the UK Parliament Foreign Affairs Select Committee, said in a statement that the result of “serious consequences for the confidence of foreign investors and the British investment in Russia.”
“Do sit in jail ‘
Speaking in an annual call-in show with the nation on December 16 Putin said: “a thief must sit in jail”, referring to Khodorkovsky’s previous conviction. President Dmitry Medvedev said Russian officials last week to refrain from comment until the lawsuit is over.
Khodorkovsky’s parents sat in the front row, listening to Judge Viktor Danilkin read the verdict. Supporters gathered in the street chanting “freedom” and could be heard in court. The police detained as many as 20 activists, Interfax reported.
Khodorkovsky’s wife, Inna, said she expects her husband in prison until at least 2012, when a presidential election will be held, which Putin would return to the Kremlin for 12 years.
“My husband will remain in prison until at least 2012, and after that who knows what will happen? Nobody does,” she said in an interview with Snob magazine published December 25.
Prosecutors are seeking a 14-year sentence for Khodorkovsky and Lebedev. The lawyers say that the time already served eight years in their prison terms will be deducted from the sentence in the current process.
$ 29 billion in oil
The court ruled that Khodorkovsky and Lebedev guilty to steal 892 billion rubles ($ 29 billion) of oil, 824 billion rubles more than the prosecution said had been stolen, Interfax reported, citing Klyuvgant. Maxim Dbar, a spokesman for the defense team, said he could not immediately confirm the number. The court may have returned to costs in the original indictment, Dbar said. During the trial, prosecutors reduced the volume of oil they said was stolen to 219 million tons from 350 million tons.
Amnesty International called on the Russian court conviction on the grounds that Khodorkovsky’s trial was unfair and politically driven appeared topple.
“Disregard for Due Process’
“The Russian authorities’ consistent disregard for due process in this study only reinforces the impression that this second round of convictions is politically motivated,” Nicola Duckworth, the London-based human rights organization director for Europe and Central Asia, said in an e -mailed statement.
Khodorkovsky’s imprisonment is “one of the irritants that investors traditionally respond,” German Gref, chief executive officer of OAO Sberbank, Russia’s largest lender, said in an interview earlier this month.
“We have our work cut out for us to improve the investment climate,” said Greve, who was a minister of Economy, when Khodorkovsky was arrested.
A conviction and long sentence is priced into the market, said Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow.
The 30-MICEX stock index moved 0.7 percent to 1663.55 on the 18:45 closes in Moscow yesterday, tracking a decline in Asian equities.
“Investors who are already active in Russia have weighed in as an afterthought,” Weafer said in a research note. A reduced sentence would be “a positive factor for strategic and portfolio investors who abstain from Russia.”
Russia is the world’s most corrupt major economy, according to the Berlin-based Transparency International Corruption Perceptions Index 2010 released October 26, sliding to 154th among 178 countries and places it next to Tajikistan and Kenya.
Khodorkovsky said he was willing to die in prison. The verdict will be “predictable,” he said in his closing statement at the trial on November 2. “Nobody believes that you can get an acquittal in the Yukos affair in a Moscow court.”
source:bloomberg
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