US ambassador warns Russians, hands off corporate vandals
Vershbow said Sunday that Washington "was disturbed by the escalation of tensions around Yukos" and concerned that "after these occurrences new doubts will arise among foreign companies that work in the Russian market and also among potential investors,"
Russia's richest man under arrest
Last Updated Sat, 25 Oct 2003 14:29:27
MOSCOW - Special forces dressed in camouflage swooped into a Siberian airport Saturday and arrested Russia's richest man.
Mikhail Khodorkovsky is head of Yukos, the largest oil company in Russia.
The country's Interfax news agency says he has been jailed on charges of tax evasion, fraud, forgery and embezzlement.
Khodorkovsky, who has publicly funded opposition parties, is one of several tycoons under investigation by the government of President Vladimir Putin. Boris Berezovsky and Vladimir Gusinsky have gone into exile, saying they fear criminal prosecution.
Russia's business elite fear the wave of investigations could hurt foreign investment and economic growth of the country.
U.S. ambassador warns of trouble for Russian economy after tycoon's arrest
11:42 PM EST Oct 26
MOSCOW (AP) - The dramatic arrest and jailing of the head of Russia's largest oil company could seriously impede the country's efforts to restore its economy, the U.S. ambassador and a prominent economist said Sunday.
The comments came a day after Mikhail Khodorkovsky, the billionaire head of the Yukos oil company, was seized by special forces at a Siberian airport, sent back to Moscow, charged with crimes including forgery, fraud and tax evasion and jailed in one of Russia's notoriously overcrowded pre-trial detention units.
Yukos and a range of Russian businessmen and politicians contend the investigation of the oil company is a political vendetta by President Vladimir Putin. Khodorkovsky, whose wealth was estimated by Forbes magazine at $8 billion US, has funded two opposition political parties.
The arrest raises questions about whether "Russian law is being used selectively," U.S. Ambassador Alexander Vershbow was quoted as saying by the news agency Interfax.
Vershbow said Sunday that Washington "was disturbed by the escalation of tensions around Yukos" and concerned that "after these occurrences new doubts will arise among foreign companies that work in the Russian market and also among potential investors," Interfax said.
That concern was echoed by Yevgeny Yasin, a top economist at the state University School of Higher Economics.
"Regarding the more long-term effects, this certainly will affect the dynamics of balance of payments, of capital flight," Yasin said on the Ekho Moskvy radio station.
In the post-Soviet economic chaos of the 1990s, particularly after the plunge of the ruble in 1998, tens of billions of dollars were sent out of the country, either legally or illegally.
Capital flight recently had been showing signs of tapering off as Russia's economy became more robust, but Yasin said it reached $7.7 billion in the third quarter of this year.
Earlier this month, the Russian economy was boosted by the decision of the Moody's rating service to give the country an investment-grade rating.
After Khodorkovsky's arrest, "I think that Moody's will either have to lower that rating or lose a significant part of its credibility," Yasin said.
The Prosecutor General's office said that Khodorkovsky was charged with fraud, forgery, embezzlement and personal and corporate tax evasion among other offenses.
Khodorkovsky and Platon Lebedev, chairman of the holding company that is Yukos' core shareholder, who was arrested in July, together caused damages of $1 billion and harmed the Russian state, the prosecutor's office said, according to news reports.
A statement from Yukos called the charges "absurd" and said the company "does not doubt for a moment that the entire investigation is politically motivated."
Even Communist party leader Gennady Zyuganov, an opponent of the post-Soviet privatizations that brought vast wealth to Khodorkovsky and other so-called "oligarchs," alleged political intentions behind the arrest.
Khodorkovsky and other oligarchs are resented by large numbers of Russians, who did not benefit from the privatization of state property. Both parliamentary and presidential elections will be held in the coming months, and the standing of pro-Kremlin parties among ordinary Russians apparently has been strengthened by the pressure being put on oligarchs by the authorities.
The Yukos investigation began in July with the arrest of Lebedev on charges of theft of state property during the 1994 privatization of a fertilizer plant. Lebedev has remained in jail awaiting trial. This month, prosecutors also filed tax evasion charges against a high Yukos manager, Vasily Shakhnovsky.
further readng :
Khodorkovsky Arrested on 7 Charges
By Catherine Belton Monday, Oct. 27, 2003. Page 1
The Elite Demand Some Answers
By Valeria Korchagina Monday, Oct. 27, 2003. Page 1
Just for fun :
Severstal to Buy No. 5 U.S. Steel Firm
Monday, Oct. 27, 2003. Page 5
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