From rags to riches to rags again

31 May 2005

President Putin has compared the oligarch s trial to the US legal proceedings against Enron boss Kenneth Lay or Bernie Ebbers of Worldcom. But the comparison is bogus. The postEnron purge has arguably strengthened US markets. Khodorkovsky s pursuit has weakened Russia.

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Mikhail Khodorkovsky, once Russia's richest man, was sentenced to nine years in jail after being found guilty of fraud and tax evasion.

The Moscow court found the head of oil firm Yukos, who once had a fortune estimated at $15bn by Forbes magazine, guilty of six out of seven charges in a verdict that took judges 12 days to read, so ending an 11month trial.

Lawyers for Khodorkovsky, 41, have said they will appeal the ruling. If the Supreme Court hears their appeal, a decision is expected as soon as this autumn.

Separately, lawyers for Yukos, which is struggling to avoid bankruptcy, have said they will contest the validity of the $24bn in back tax claims lodged by the government against the company.

The firm, once Russia's biggest oil company, has already paid $5bn of taxes. A further $9bn has been paid following the expropriation and subsequent auction of Yukos' main oil asset, Yugansk, to a stateowned oil firm.

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