Khodorkovsky Charges in $25.5 Billion Case Revealed by Russia

By Garfield Reynolds and Emma O’Brien

Feb. 17 (Bloomberg) -- Russian prosecutors released new details of their indictment of Mikhail Khodorkovsky, the imprisoned former chief executive officer of OAO Yukos Oil Co., on charges of embezzling 896 billion rubles ($25.5 billion).

Khodorkovsky conspired in 1998 with other Yukos shareholders, including former business partner Platon Lebedev, to embezzle and launder 892.4 billion rubles of oil and 3.6 billion rubles of shares in companies associated with Vostochnaya Oil Co., in which Yukos held a controlling stake, the Prosecutor General’s Office said yesterday in a statement on its Web site.

The details, which relate to charges brought two years ago, don’t amount to an expansion of the case against Khodorkovsky, his Moscow-based lawyer Yuri Schmidt said by telephone yesterday. They are part of a 14-volume brief provided by the state investigator to Khodorkovsky’s legal team, he said. The tycoon’s lawyers have dismissed the charges as “absurd.”

Khodorkovsky, once Russia’s richest man with a fortune Forbes magazine estimated at $15 billion, is serving an eight-year sentence in Siberia for fraud and tax evasion, charges he claims were brought in retribution for opposition to then-President Vladimir Putin. The dismantlement of Yukos, once Russia’s biggest oil producer, helped Putin’s government consolidate its hold over the world’s second-largest oil exporting industry.

State-run OAO Rosneft became Russia’s biggest oil producer by acquiring most of Yukos’s assets when the company was declared bankrupt under the weight of more than $30 billion in back taxes.

Deputy Prosecutor General Viktor Grin confirmed the investigators’ conclusion that Khodorkovsky, 45, and Lebedev, 49, are guilty of the theft and money-laundering charges.

Second Trial

Schmidt said it remains unclear when Khodorkovsky will stand trial for a second time, though it’s likely to be held in Moscow.

The tycoon was arrested at gunpoint when his private plane was stormed at a Siberian airport in October 2003 and convicted in a Moscow court in 2005.

Putin, who remains at the center of Russian power as prime minister, said in an interview last month that subduing billionaires has never been his goal as long as their fortunes are earned legally and they contribute to the social good of the country.

To contact the reporters on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.netEmma O’Brien in Moscow at eobrien6@bloomberg.net;