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Home News Khodorkovsky: stained oligarch or dissident martyr?

Khodorkovsky: stained oligarch or dissident martyr?

Published on 13/12/2010

Mikhail Khodorkovsky was once Russia's richest man, with a 15-billion dollar fortune, the head of a flourishing international oil giant and even touted as a possible alternative Russian leader.

But that all changed at dawn on October 25, 2003.

Khodorkovsky’s private jet had landed in the Siberian city of Novosibirsk for a routine refueling stop as he headed for a business meeting. But the plane found itself surrounded by armed agents from the FSB security service.

They rushed onto the plane and arrested the tycoon, starting a process that two years later saw him sentenced to eight years in prison on charges of fraud and tax evasion.

For the authorities, Khodorkovsky, 47, is a common financial criminal who profited illegally from the chaotic asset-stripping of post-Soviet Russia’s natural resources.

But rights activists and many Western commentators claim he is a martyr suffering a purely political persecution at the hands of president-turned-Prime Minister Vladimir Putin.

Khodorkovsky will on Wednesday begin hearing the verdict in his second trial on charges of embezzlement and money laundering that could see him receive an additional 14-year term.

In an emotional closing address to the court, he portrayed himself as a visionary crusader for clean business and social freedoms in Russia who had paid the price for endangering the authority of the elite.

“I remember the end of the last decade. I was 35. We had built the best oil company in Russia,” he said.

“We all hoped that the time of troubles was past and that in the stability that our sacrifice and labour created we could calmly build a new life and a great country.

“Alas, this hope has so far not been fulfilled. Stability became something like stagnation. Society has frozen. I am ashamed of my state. We, citizens of Russia, patriots of our country, can and must change this.”

Khodorkovsky was serving his first term in a remote Siberian prison camp before being transferred to a Moscow detention centre in 2009 for his second trial.

Whatever the outcome, his life’s work — the oil company Yukos which he built out of the privatization of Soviet industry — has already been broken up by the state and its remnants sold off.

Prior to his arrest, Khodorkovsky was Russia’s richest man, with a worth that Fortune magazine estimated at 15 billion dollars and one of Russia’s most famous post-Soviet oligarchs.

Born into a family of chemical engineers in Moscow, he obtained his first degree in chemical engineering before going on to study economics. He is said to have been an energetic member of the Soviet Komsomol youth movement.

Even before the fall of the Soviet Union and aged just 26, he established Bank Menatep which he would later use to acquire a majority stake in Yukos.

He gained control over Yukos through a shady privatization during which insiders picked up Russia’s choice natural resources assets for bargain-basement prices at questionable auctions.

Khodorkovsky and his associates paid a reported 390 million dollars for Yukos, which before his arrest had a market capitalization of more than 30 billion dollars.

The soft-spoken Khodorkovsky proved a ruthless operator, aggressively consolidated control over what eventually became Yukos, muscling out foreign minority shareholders.

After the 1998 financial crisis, he invested massive amounts back into Yukos, which became the first Russian major to adopt international accounting standards and began to hire Western-trained managers.

Some suggested President Dmitry Medvedev might grant Khodorkovsky a pardon upon entering office in May 2008 as a signal that he was serious about fulfilling promises to end what he had called Russia’s “judicial nihilism”.

But so far the authorities have shown little sign of relaxing their attitude towards Russia’s most famous prisoner.