Mikhail Khodorkovsky's Indictment and Beyond

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Introduction

Mikhail Khodorkovsky, once the wealthiest man in Russia and one of the wealthiest in the world, had seen much of his wealth evaporate due to the collapse of the Russian petroleum company, Yukos. On 25th October 2003, Khodorkovsky was arrested at gunpoint on a Siberian airport runway by the Russian prosecutor general's office on charges of tax evasion. On 31st October, the government took the unprecedented step of freezing the shares of Yukos. The Russian Government indicated that it would sell major assets of Yukos in December 2004.

Khodorkovsky's supporters felt Putin's actions were a retaliation for the former's support of political groups that opposed the government's policies. Khodorkovsky's opponents believed that he had to answer for wrong doing related to the privatization of state assets during the 1990s.

On 31st May 2005, following a trial in a Moscow court for fraud, tax evasion, embezzlement and running a criminal organization, Khodorkovsky was sentenced to nine years of imprisonment. In addition, the court ordered Khodorkovsky, along with co-defendant and colleague Platon Lebedev, to pay 17.4 billion rubles ($619 million) in civil damages and penalties.

In 1995, the Russian Government was facing pressure from international financial institutions to cut inflation and balance the budget. The situation had become so bad that the government was forced to borrow money from commercial banks to meet its obligations. The government introduced a privatization scheme known as "loans-for-shares"...

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