Oil Report

Russia court to hear Khodorkovsky early release plea

CHITA, Russia, Aug 20 (Reuters) - Jailed former Russian oil tycoon Mikhail Khodorkovsky’s appeal for early release comes before a court on Thursday in what his lawyers say will be a test case for President Dmitry Medvedev.

Khodorkovsky, who is serving an eight-year jail term for tax evasion and fraud, says he is the victim of corrupt officials under former President Vladimir Putin who wanted to carve up his business empire and who feared his political ambitions.

His lawyers say the appeal will be a test case for Russia’s new president, who has said he wants to improve the rule of law and reform the judicial system.

“I think that this is a test case for President Medvedev,” Khodorkovsky’s main defence lawyer, Yuri Shmidt, told Reuters.

Khodorkovsky, once Russia’s richest man, built YUKOS-MENATEP into one of the country’s biggest industrial groups by buying state assets cheaply and trading commodities in the chaos following the fall of the Soviet Union.

His arrest in 2003 by FSB security service officers at a Siberian airport sent shockwaves through Russia’s business community, who feared the Kremlin would try to regain control of key oil production assets sold off in the 1990s.

He was convicted in 2005 and is currently imprisoned in Chita, a remote town near the frontier with China, around 7,000 km east of Moscow. Khodorkovsky, 45, says he is innocent.

Russian officials say he was convicted of a crime and must serve his sentence. They deny the Kremlin has influence over the judiciary, which is formally independent.

Prosecutors filed new charges against Khodorkovsky in June, accusing him of embezzlement and laundering nearly $21 billion. His lawyers say those charges could give Russian authorities the chance to keep the former tycoon in jail for years to come.

On Wednesday, a few well-organised Khodorkovsky supporters stood in a summer rain shower outside Chita theatre, handing out flyers and asking passers-by to sign a petition in support of the tycoon and his jailed business partner Platon Lebedev.

The Chita mayor’s office had granted permission for a rally and Khodorkovsky’s supporters greeted ballet patrons entering the theatre for a production of Swan Lake.

“People who know the subtleties of the case, and I have no relationship to them, cannot imagine why he was sentenced in the first place,” said Alexander Lyitsus, deputy director for the Chita mayor’s office of public affairs.

But Khodorkovsky supporter Maria Savoteyeva was sceptical about any positive outcome from his appeal.

“As a civilian activist I should be sounding out the positives, but as a right-minded human being living in today’s Russia, there is just no room for optimism,” Savoteyeva said. (Editing by Tim Pearce)