RUSSIA: MOSCOW COURT FREES MAJOR YUKOS SHAREHOLDER VASILY SHAKHNOVSKY DESPITE CONVICTION FOR TAX EVASION.

Record ID: 850310

  • Title: RUSSIA: MOSCOW COURT FREES MAJOR YUKOS SHAREHOLDER VASILY SHAKHNOVSKY DESPITE CONVICTION FOR TAX EVASION.
  • Date: 5th February 2004
  • Summary: (U4) MOSCOW, RUSSIA (FILE - DECEMBER 23, 2003) (REUTERS) GV/MV: MIKHAIL KHODORKOVSKY BEING ESCORTED OUT OF COURT BUILDING; KHODORKOVSKY SUPPORTERS OUTSIDE COURT (3 SHOTS) (1.20) (U4) MOSCOW, RUSSIA (FILE - MAY 28, 2003) (REUTERS) GV/MV: MIKHAIL KHODORKOVSKY SIGNING CONTRACT WITH CHINESE OIL COMPANY; MEDIA; MIKHAIL KHODORKOVSKY SHAKES HANDS WITH CHINESE OIL COMPANY OFFIC
  • Embargoed: 20th February 2004 12:00
  • Keywords:
  • Location: MOSCOW, RUSSIA
  • City:
  • Country: Russia
  • Topics: Crime,Politics
  • Reuters ID: LVA3UPMOQENWTSYITY036E4Z52OC
  • Aspect Ratio:
  • Story Text: A Moscow court left a major YUKOS shareholder a free man on Thursday (February 5), despite convicting him of tax evasion.
    The suspended one-year sentence handed to Vasily Shakhnovsky prompted stock analysts to say it might mean the Kremlin and the oil giant were close to ending a bitter row.
    The verdict gave a boost to shares in YUKOS which have been under pressure for months following a series of legal attacks on YUKOS and the jailing in pre-trial custody of key owner Mikhail Khodorkovsky last October on charges of fraud and tax evasion.
    Irina Kolesnikova, judge at the central Moscow Meshchansky court, told reporters that Shakhnovsky had been found guilty of tax evasion but left free due to "changed circumstances".
    Lawyers for the defendant, who had been free under police supervision since being charged with tax evasion in October, said the court noted that he no longer worked for YUKOS.
    Analysts said the treatment of Shakhnovsky, who had faced up to 18 months in jail, as well as the release from pre-trial detention of a YUKOS refinery manager last week, suggested the firm's owners may be negotiating with the Kremlin.
    The legal onslaught against the firm and major shareholders has been widely seen as orchestrated by President Vladimir Putin's administration to what it saw is increasing meddling in politics by Khodorkovsky, Russia's richest man.
    Shakhnovsky's lawyers quoted the court decision as saying that he was set free because he no longer worked for YUKOS or any affiliate and did not represent a threat to society.
    Bulat Karimov from Aton brokerage said that the important part of YUKOS's strategy to reach a compromise with the Kremlin was last week's promise that no major shareholder would in future serve in the firm or interfere in its daily activities.
    Shakhnovsky, smiling as he was met by a crowd of reporters outside the court said his lawyers had predicted the outcome of his hearing on Thursday.
    "As my lawyers explained to me, even if the court had ruled in favour of the prosecution, I would have been free to go," said Shakhnovsky.
    The release of Shakhnovsky is the second recent modest win for YUKOS, whose future has looked increasingly bleak and which has been going through a painful divorce with another Russian oil major, Sibneft, with which it had almost merged.
    Last week, a regional court freed the chairman of YUKOS's Kuibyshev refinery, who had also been charged with tax evasion.
    After the announcement, shares of YUKOS gained nearly two percent on the MICEX bourse, but slid later to trade
    0 percent up at 330 roubles at 1040 GMT. They were traded
    14 percent up on the RTS bourse at $11.54, outperforming the broader market by around one percent.
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