Tue, Oct 28, 2003 - Page 7 News List

US concerned over Khodorkovsky arrest

THE GUARDIAN , MOSCOW

The US expressed its concern Sunday night at the arrest of Russia's richest man, Mikhail Khodorkovsky, voicing the first international condemnation of the detention of the billionaire, the day after his private jet was surrounded on a Siberian runway by armed police arresting him for tax evasion.

Washington's ambassador to Moscow, Alexander Vershbow, said the arrest could "negatively affect" foreign investment in Russia, and suggested the law may be being "used selectively."

Khodorkovsky is head of Yukos, the largest Russian oil company, and has used part of his estimated US$11 billion wealth to fund political parties opposing President Vladimir Putin.

Khodorkovsky spent his first night in a Russian jail on Sunday. He has been given a space in the Matrosskaya Tishina pre-trial detention facility, with five other inmates in his cell.

Khodorkovsky's lawyer said yesterday that he had no information on his client's condition, as they had not been able to meet.

A court on Saturday night agreed that Khodorkovsky could be held for up to two months before trial for a myriad of charges, from personal to corporate tax evasion, to embezzlement which had allegedly cost the state a billion dollars -- a tenth of his estimated personal wealth. Further charges are expected to follow, prosecutors said.

The billionaire was detained by the troops of the Russian security service, the FSB, on the runway of Novosibirsk airport at 5am on Saturday. Prosecutors said he had ignored a court summons, which he denied.

Many were surprised at the forcible nature of the arrest, the billionaire having pledged not to flee the country, and challenging prosecutors to lay out their accusations in a court of law. Since June, police have interrogated Yukos associates and employees -- one allegedly with drugs -- and raided everything from their offices to a nursery and political party they financed. Two senior associates of Khodorkovsky have also been arrested, one charged with tax evasion.

A statement from Yukos called the charges against its chief executive "absurd" and said the firm "does not doubt for a moment that the entire investigation is politically motivated."

Analysts were expecting a sharp reaction on the country's financial and stock markets.

"There will be a dramatic stock decline, not just a correction," said Bulat Karmov at Aton Brokerage told Associated Press. "This company is responsible for 30 percent of market turnover."

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