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RUSSIA: Oil Executive Enters Not Guilty Plea in Fraud Case

by Erin E. Arvedlund New York Times
July 16th, 2004

Mikhail B. Khodorkovsky, Russia's richest man, pleaded not guilty on Thursday to charges of tax evasion, fraud and embezzlement.

"I understand the accusations presented," Mr. Khodorkovsky, 41, told the court. "I do not consider myself guilty on any count." It was the first time he had spoken out about the charges since he was jailed last October.

After pleading not guilty to all the charges against him, Mr. Khodorkovsky, the former chief executive of the oil company Yukos, asked the court for a one-day postponement of his opening statement.

On Thursday, the state prosecutor, Dmitri Shokhin, read through a battery of charges accusing Mr. Khodorkovsky and his codefendant and business partner, Platon A. Lebedev, of setting up an "organized criminal group" to fraudulently acquire 20 percent of a lucrative fertilizer company, Apatit, during Russia's turbulent privatization era.

In his opening statement, Mr. Khodorkovsky "is expected to indicate his concerns about the way things are going in Russia," said Charles Krause, a spokesman for Yukos and the Group Menatep business empire, which holds a majority stake in Yukos.

Mr. Khodorkovsky and Mr. Lebedev would both face 10 years in prison if convicted.

The government's case centers, not on Yukos, but on the 1994 privatization of Apatit, one of the many business deals that helped Mr. Khodorkovsky build his business empire. Mr. Lebedev also pleaded not guilty to all charges on Thursday. Both men are major shareholders in Menatep.

The court will resume hearings on Friday, when the defendants will get a chance to comment on the charges against them.

Mr. Khodorkovsky's arrest, one of the most highly publicized cases in post-Soviet Russia, has been accompanied by an investigation of Yukos, which may face bankruptcy if it fails to pay back taxes. The dual investigations of Mr. Khodorkovsky and his company are widely seen as a Kremlin-inspired campaign to part him from the source of his wealth and punish him for his political ambitions.

On Thursday, Yukos began paying part of its initial $3.4 billion debt payment for 2000. The company had offered Wednesday to pay $1.3 billion of its outstanding debt right away. It is barred from selling assets to raise more cash. This month, the company offered its stake in a smaller oil rival, Sibneft, which it said was worth $4.2 billion, to settle what were expected to be mounting tax bills.


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