Jailed Russian oil magnate resigns

Khodorkovsky's decision clears way for campaign for public office, allies say

November 04, 2003|By NEW YORK TIMES NEWS SERVICE

MOSCOW - Mikhail B. Khodorkovsky resigned yesterday as chairman of Russia's richest company, Yukos Oil, even as he defiantly vowed to continue a public - and possibly a political - campaign "to build an open and truly democratic society in Russia."

Khodorkovsky, imprisoned since Oct. 25 on charges of embezzlement, fraud and tax evasion, said in a statement that he was stepping aside in order to shield the company from what he and others have called a politically motivated prosecution.

But two people close to Khodorkovsky said his decision also cleared the way for a campaign for political office, possibly even a challenge to Vladimir V. Putin in presidential elections scheduled for March.

Jailhouse campaigns have a precedent in Russia's new and chaotic democracy, but a challenge to Putin, whose re-election next year has been considered a given, could send politics here careering in dramatic and unpredictable directions.

"He is a man with vision who would not be excluding any options if circumstances were to force him into one corner or another," said one person who has worked closely with Khodorkovsky. "He would respond to that."

Asked if that could include a presidential challenge, this person added: "That is an option that he could not exclude."

Another person close to Khodorkovsky said the matter could become clear in a matter of days. "I think the events are pushing him to getting involved in politics," he said.

Khodorkovsky's announcement severs his managerial role with Yukos, which is in the last stages of a merger with its smaller rival, Sibneft, to create Russia's largest and the world's fifth-largest private oil company. He still has an enormous financial interest in the company, though last week prosecutors froze 40 percent of the company's shares, controlled by him and his partner, Platon Lebedev, who is also in jail.

A spokesman for Group Menatep, the financial company controlled by Khodorkovsky and Lebedev, said Khodorkovsky had transferred control of his stocks to another Yukos shareholder, Leonid Nevzlin, who is in Israel. That leaves Nevzlin with the authority to vote on behalf of Khodorkovsky while he remains in prison.

"I have to do all I can to pull our work force safely out from under the blows that are being directed at me and my partners," Khodorkovsky said in his statement, released by Yukos last evening.

Khodorkovsky defended the company's successes since its founding in 1996, saying Yukos had erased $3 billion in debt and, in an apparent response to prosecutors' charges of tax evasion, paid "in excess of $5 billion" in taxes this year.

Although Yukos, like many of Russia's richest companies, has its roots in the clouded privatization of state assets in the 1990s, Khodorkovsky said the company had become a model of efforts to adapt international standards of accounting and corporate governance.

Yukos stock soared in late trading on news of Khodorkovsky's resignation, rising 13 percent, to $12.65 a share, though it was still down more than 20 percent since his arrest. Analysts said the resignation removed some uncertainty about the company's future leadership.

After his arrest, Khodorkovsky distanced himself from the day-to-day operations, appointing a career oil man, Steven M. Theede, as chief operating officer, and Bruce K. Misamore, as chief financial officer.

An official said Friday that Simon G. Kukes, chairman of the company's board, would be appointed chief executive of Yukos today. The Russian-born American previously ran a rival oil company, Tyumen Oil, before joining Yukos this year.

"Khodorkovsky's resignation definitely makes the company harder to attack and puts distance between him and Yukos," said Alasdair P.M. Breach, chief economist at Brunswick UBS in Moscow. "Going forward, however, it's unclear to what extent is Putin prepared to let the company go."

There were new signs yesterday of division - and confusion - within Putin's government over the case.

In an interview published yesterday, Russian Finance Minister Aleksei L. Kudrin dismissed the idea that the case would hurt the economy.

Kudrin's remarks came a day after Putin's new chief of staff, Dmitri A. Medvedev, had said the opposite, warning prosecutors that their actions, especially the freezing of Yukos shares, were potentially reckless and counterproductive.

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