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Mikhail Khodorkovsky


Mikhail Khodorkovsky trialOnce Russia’s richest man, Mikhail Khodorkovsky is now the one of the country’s most controversial figures. Prior to his October 2003 arrest on fraud and tax evasion charges, the Russian-Jewish businessman was majority shareholder of Russia’s largest oil company YUKOS and had amassed a fortune estimated at more than $15 billion. Following his arrest, much of his wealth evaporated along with the share price of YUKOS. Worse than the loss of his money, he also lost his freedom. Mikhail Khodorkovsky now sits in a Siberian prison serving an eight year sentence and faces new charges of embezzlement and money laundering.


Like most post-Soviet oligarchs, Mikhail Khodorkovsky made his fortune in the early 1990s when massive amounts of shares of state owned companies were privatized for bargain prices. Critics and the prosecution maintain that Khodorkovsky accumulated control of his estimated 44% of YUKOS shares through insider deals, extensive fraud and accounting schemes. While many of these charges are hard to refute, an outsider looking in may ask, "how does Khodorkovsky’s circumstance differ from many of the other business dealings of this era?" In the opinion of some, including the U.S. State Department, there's little difference. They said the arrest "raised a number of concerns over the arbitrary use of the judicial system", as it appeared there were "selective" prosecutions occurring against YUKOS officials but not against others.


Some argue that the true prosecution of Mikhail Khodorkovsky lies in fact that he became too influential in Russia’s political arena. Khodorkovsky made no secret that he supported the liberal opposition to President Putin. "Ideologically I am close to the Union of Rightist Forces (SPS) and Yabloko, and I continue to finance these parties,” he said before his October 2003 arrest. Khodorkovsky had also extended his political involvement by acquiring the rights to publish the prestigious Moskovskiye Novosti newspaper and hiring a leading investigative journalist highly critical of the Russian president.


Another factor that may have drawn discontent from the Kremlin was Khodorkovsky’s desire to sell Russian oil and gas reserves to foreign interests. In April 2003 Khodorkovsky announced that Yukos would merge with Sibneft (controlled by Ombramovich and Berezovsky), creating an oil company with reserves equal to those of Western petroleum multinationals. In talks with ExxonMobil and ChevronTexaco, he wanted to sell a large stake of the merged company, "opening Russia to the West and Western business practices". With an estimated reserve of 19.5 billion barrels of oil and gas, it was (understandably) too important of an asset to fall under foreign control.


Ongoing saga


With the forced sale of YUKOS under Russian bankruptcy proceedings and his political aspirations severely limited due to his new financial and legal constraints, one would think the story of Mikhail Khodorkovsky would just fade away. This is not the case. On February 5, 2007, new charges of embezzlement and money laundering were brought against both Khodorkovsky and his partner Lebedev, just months before they became eligible for parole. On March 31, 2009, their new trial began in Moscow. If convicted the two men face up to 22 more years in prison. Both pleaded not guilty, denouncing new charges as vague accusations invented to keep them behind bars indefinitely.



Mikhail Khodorkovsky Facts


Russian Name: Михаил Ходорковский

Date of Birth: June 26, 1963

Place of Birth: Moscow, USSR

Former Business Ventures:

  • Bank Menatep

Former YUKOS Associates:

  • Platon Lebedev (CEO of Group Menatep)
    • accused with and convicted on the same charges as Khodorkovsky
  • Vasily Aleksanyan (executive vice president)
    • released from prison January 2009 on 50 million ruble bond (due to his grave medical condition)
  • Leonid Nevzlin (high ranking executive)
    • lives in self-imposed exile in Israel (Russia requesting his extradition)
  • Alexey Pichugin (YUKOS chief of security)
    • 24 year sentence for conspiracy in several YUKOS related murders


YUKOS shares chart


Mikhail Khodorkovsky and Platon Lebedev



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