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Yukos case ends with 9 years for its former CEO, Mikhail Khodorkovsky

Mikhail Khodorkovsky evaded to pay about 55 million rubles of taxes and insurance fees during only one year

The trial on the former head of the Russian oil giant Yukos, Mikhail Khodorkovsky and his accomplices, finally ended with a sentence. Mikhail Khodorkovsky and his business partner, Platon Lebedev, have been found guilty of fraud and tax evasion charges and thus sentenced to nine years in jail.

The sentence was brought down on Mr. Khodorkovsky on the 12th day of the long verdict-reading process, which marked the end of the most discussed trial in post-Soviet Russia. It took the judges two weeks to find Khodorkovsky, Lebedev and other defendant on the case, Andrey Krainov, guilty on all counts.

The verdict-reading process was supposed to start on April 27th, but the date was later delayed to May 16th. The prosecutor demanded ten years of imprisonment for Mikhail Khodorkovsky and Platon Lebedev.

The conviction of Khodorkovsky and Lebedev became the second sentence in the notorious Yukos case. A Moscow city court sentenced Aleksei Pichugin, an officer of the Yukos's security service, to 20 years in prison on March 30th. The jury found Pichugin guilty of killing two residents of the city of Tambov in 2002.

The indictment against Mikhail Khodorkovsky includes two transactions of privatization, which were concluded with all possible violations. The transactions were typical for the murky era of the so-called “thievish capitalism” in Russia, when quite potential enterprises were sold at low prices. Furthermore, additional terms of such transactions (investments in enterprises and regional economies, for example) were not executed at all.

According to prosecutors, Khodorkovsky and Lebedev fraudulently obtained 20 percent of shares of the fertilizer company Apatit and 44 percent of shares of the Research Institute of Fertilizers and Insecto-Fungicides. Prosecutors believe that Khodorkovsky obtained an opportunity to own a complex of buildings of the above-mentioned research institute in Moscow.

When Khodorkovsky became a registered entrepreneur without the education of a corporate person in 1998, he started paying taxes as an individual businessman. According to prosecutors, Mikhail Khodorkovsky evaded to pay about 55 million rubles of taxes and insurance fees during only one year, from 1998 to 1999.

It is noteworthy that Yukos was not the only company that used various schemes to evade tax payments. Several companies volunteered to pay back all the funds that they had been able to save, after the sad experience with Yukos.

The first reactions:

The first deputy of the Duma's Security Committee Chairman, Mikhail Grishankov, doesn't see nothing unexpected in the court's decision. “Despite everything anyone has to answer for one's wrongdoings, be it a billionaire or a plain man. The only problem is that the citizens wish the responsibility came as soon as possible”, said the MP to “I think that those who call this case political are either misled or misleading”.


Mr. Grishankov is sure that the sentence on Khodorkovsky won’t affect Russia negatively. “The trials like this happen periodically in every country”, said the legislator referring the case of Enron in USA and of Parmalat in Italy.


Speaking about the Kodorkovsky's case, Mr. Grishankov reminded about the publication in Novaya Gazeta daily in 1998. “The paper published the tremendous investigation, called “The Well”, where the fraudulent activity of a group of companies was minutely described. Yukos was behind that fraud. Since that time I started wondering why the Russian justice didn't pay any heed to the situations like this.


It is not the source of their capital which is in question, but the responsibility for a crime. And I am utterly surprised that this case wasn't considered during the trial”.


According to Grishankov, the sooner the trial is finished, the better. “Especially since there are influential forces interested in charging this trial with politics”.


Valery Fyodorov, the Federation Council member from the Volgograd region's executive approves Khodorkovsky trial. “Mikhail Khodorkovsky wanted to be more insidious and richer that others. He made a cunning system of tax evasion and money laundering. The guys wanted to be richer at the expense of the poor. There's nothing surprising that reading of the sentence has taken so much time: the case is too complicated and novel. As for the outcomes for the image of Russia, impunity is more dangerous for it”, opined the member of the Russian parliament's upper chamber.