FT: Khodorkovsky set to face fresh charges

From the FT:

Khodorkovsky set to face fresh charges By Catherine Belton in Moscow Published: February 4 2007 23:04 Russian prosecutors are due to press charges on Monday against jailed Yukos founder Mikhail Khodorkovsky, his lawyers said. The new charges are expected to centre on accusations of large-scale embezzlement and money laundering, quashing any chance of parole this year and potentially increasing his eight-year prison sentence. They come as the Russian government prepares to begin a bankruptcy sale of Yukos, once Russia’s biggest oil company. Mr Khodorkovsky’s lawyers said the additional charges seemed aimed at legitimising the sell-off, which Mr Khodorkovsky’s defence team have branded as “theft”. “They want to give legitimacy to the future auction,” said Robert Amsterdam, a member of Mr Khodorkovsky’s international defence team. “They think if they keep hitting Khodorkovsky something will stick.” The charges could also be politically motivated. Mr Khodorkovsky is eligible for parole this year because he would have served half his jail term since his arrest in 2003. That raises potential political risks for President Vladimir Putin in a crucial pre-election year Money-laundering charges could lead to attempts to block funds prosecutors believe could be held by Mr Khodorkovsky’s team in accounts abroad, lawyers said. “They think Khodorkovsky has $10bn [£5bn] stashed away abroad,” said Pavel Ivlev, a former lawyer for Yukos. “They think he could use this cash to fund the opposition in an election year. They are trying to find it and want at least to block it.” The new charges come 18 months after Mr Khodorkovsky and his business partner, Platon Lebedev, were sent to Siberian prison camps after being found guilty of fraud in a case criticised as being politically motivated. Mr Lebedev’s lawyer, Yelena Liptser, said prosecutors had informed her that charges would be pressed against him too. Yury Shmidt, Mr Khodorkovsky’s lawyer, said police detained him and a team of four other defence lawyers for about an hour on Sunday evening as they left Moscow for the east Siberian city of Chita, where they say prosecutors are due to present a formal indictment in court on Monday. Mr Shmidt said that prosecutors could yet postpone handing down the indictment and had not made clear the exact charges. When Mr Khodorkovsky and Mr Lebedev were transferred to Chita in December for questioning, prosecutors said they were preparing to press money-laundering charges, which carry a sentence of 10 to 15 years. Mr Khodorkovsky’s def­ence team said they were expecting the charges to centre on criminal cases already pursued against other Yukos employees: the embezzlement of $13bn in Yukos crude sales since 2001 through two trading companies registered in the west Russian region of Mordovia, and the subsequent laundering of the proceeds. Charges relating to an embezzlement case over transfers of shares of Eastern Oil Company, or VNK, could be pressed too. Lawyers say the accusations in both cases were “absurd”.