Russian billionaire seized in dawn raid
Abramovich associate and outspoken critic of Putin arrested on theft charges
Nick Paton Walsh in Moscow
Sunday October 26, 2003
The Observer
Masked and armed special forces surrounded a private jet on a Siberian runway before dawn yesterday and arrested its occupant, Russia's richest man, in what is being seen as the latest and most dramatic move in the Kremlin's crackdown on political opponents.
Billionaire Mikhail Khodorkovsky was escorted from his plane and reportedly beaten before being taken to Moscow for interrogation. He was later charged with forgery and fraud ammounting to more than a billion dollars. It brought to a head months of investigation into his company, oil giant Yukos, by Kremlin-backed prosecutors.
Khodorkovsky is a critic of President Putin and has openly funded opposition parties. Analysts say the actions against his company are a Kremlin-directed campaign to keep him out of politics. Businessmen, meanwhile, fear that the probe will chill foreign investors' recent enthusiasm for Russia and impede the country's economic recovery. Prosecutors asked the courts to remand him in custody and said further charges could follow in the 'unprecedented investigation'.
Unconfirmed reports from the scene of the arrest said the billionaire was beaten. 'They used the same sort of special forces they would were they dealing with a terrorist,' said Alexander Shadrin, spokesman for Yukos.
Officials said last night he was charged with large-scale fraud, personal and corporate tax evasion, 'persistent disobedience over a court decision, inflicting damage on property owners through deceit, repeated forgery of official documents, and embezzlement'.
Putin met his top advisers yesterday in a bid to contain the political and economic damage the arrest may cause. While he has distanced himself from the probes, saying he cannot intervene into investigations over 'the serious matter of murder', few believe police would keep up such a high-profile persecution without his consent.
The arrest appears to mark a turning point in Russia's pursuit of democratic and economic norms. MPs and analysts condemned it as an example of the Kremlin's use of the law to pursue its own political ends. Some predicted an economic crash as severe as the 1998 crisis would follow as investors fled a perceived crackdown on freely run big business.
Khodorkovsky is worth an estimated $11 billion, and is head of the largest oil company in Russia, YukosSibneft, formed this month when Yukos completed a $30 billion merger with Chelsea boss Roman Abramovich's oil giant Sibneft.
An advocate of free market reforms and funder of political opponents to Putin, Khodorkovsky and his associates were first targeted by Russian prosecutors in July. A Yukos shareholder was jailed and one of the company's security chiefs was lengthily interrogated allegedly with psychotropic drugs. Interrogations, arrests, and even raids on a political party and a nursery school sponsored by the billionaire followed. Last week a senior Yukos employee, in charge of its day-to-day auditing, was charged with tax evasion.
Prosecution officials said Khodorkovsky was detained for failing to comply with a court order demanding his appearance as a witness in a criminal case on Friday morning. Shadrin said it was only on Thursday morning that Yukos received the request. His lawyers replied he was on a business trip and could only attend on or after Monday.
A source close to law enforcement told The Observer that the final 'plan' focused on Khodorkovsky being removed as the head of Yukos, but for the company to escape unscathed. Rumours abound that US giant ExxonMobil intends to pay up to $25bn for a 40 to 50 per cent stake in YukosSibneft, a deal that would further boost Russia's international appeal to investors and Kremlin revenues.
Yet the arrest may prove popular with the poverty-stricken electorate. Many Russians dislike the country's billionaires, or oligarchs, who got rich from buying up state resources at curiously low prices.
[/justhaveto] 
