Over a barrel

On 31 May 2005, Mikhail Khodorkovsky shuffled into the spartan confines of Moscow’s Meshchansky courtroom for the last time, his hands and feet bound in shackles. Alongside co-defendant Platon Lebedev, he was placed inside a steel cage, flanked either side by armed militsiya guards. He was not facing trial for murder or some other violent crime, but for alleged fraud and tax evasion as part of a wider case against Russian oil giant Yukos, of which he was CEO.

After 12 days, the judges had finally finished reading from the 1,300-page judgment and delivered their verdict. Khodorkovsky was sentenced to nine years in a Siberian labour camp. He remains imprisoned to this day.

It was a ‘shameful conclusion’ to what the late US Democratic Congressman Thomas Lantos dismissed as ‘a political trial, tried before [a] kangaroo court’, and a sad end for one of Russia’s greatest corporate success stories.

Established during the country’s murky privatisation period of the early 1990s, the rampant profiteering of which saw the birth of a new ultra-rich ruling class – the so-called ‘oligarchs’ – Yukos at its peak was one of the world’s largest private oil companies. Already accounting for around 2% of global oil production, Yukos’ future seemed assured when in April 2003 the company agreed to a landmark $35bn merger with its main rival, Roman Abramovich’s Sibneft. The move was to herald a new dawn for Russian industry and commerce, with the combined company ranked as the world’s largest by oil reserves.

It was not to be. Less than six months later, a sustained assault by the Russian authorities led to the bankruptcy and eventual collapse of Yukos.

To read the rest of this article subscribe to Legal Business.