Ex-Yukos CEO Mikhail Khodorkovsky calls charges against him "absurd"

MOSCOW (AP) _ The former head of Russia's largest oil company, Mikhail Khodorkovsky, told a court Friday that the charges of tax evasion and fraud against him were ``absurd,'' a news report

Friday, July 16th 2004, 6:19 am

By: News On 6

MOSCOW (AP) _ The former head of Russia's largest oil company, Mikhail Khodorkovsky, told a court Friday that the charges of tax evasion and fraud against him were ``absurd,'' a news report said.

The statement from Khodorkovsky, Russia's richest man, was part of his first full formal response to the charges since he was arrested at gunpoint at a Siberian airport nearly eight months ago.

``They are accusing me of not paying taxes, but I will prove this is absurd,'' Khodorkovsky said, according to the ITAR-Tass news agency.

Khodorkovsky faces an array of charges including tax evasion, fraud and forgery; a conviction could bring a sentence of up to 10 years in prison. He spoke a day after he and co-defendant Platon Lebedev pleaded entered pleas of innocent.

Lebedev, who has told the court he is ill, also made a statement, saying the charges against him were fabricated and that there is no proof of his guilt.

Also Friday, defense lawyers alleged that the court was biased, ruling exclusively in favor of the prosecutors. Khodorkovsky attorney Karinna Moskalenko said the court refused to require prosecutors to provide evidence they cited as motivation for keeping Lebedev in custody.

The judge ordered the trial adjourned until Tuesday.

The case is part of a complex web of legal actions against Yukos. The government is seeking $3.4 billion in back taxes that Yukos says could force it into bankruptcy.

The state says the legal actions against Yukos and Khodorkovsky are part of an anti-corruption drive, but critics say they are Kremlin-led retaliation for the tycoon's political aspirations and growing clout.

The charges against Khodorkovsky and Lebedev center on the 1994 privatization of a company that makes a key fertilizer component _ one of the deals that helped Khodorkovsky build an empire that made him Russia's richest man.

Prosecutors say Khodorkovsky and Lebedev were part of an ``organized group'' that won a 20 percent stake in the company, Apatit, through a scheme involving shell structures that bid for the shares.

Yukos, meanwhile, is struggling to find a compromise that would allow it to restructure its debts and keep the government from seizing its key assets. At the same time, ITAR-Tass quoted a Justice Ministry official, Andrei Belyakov, as saying that Yukos has begun making payments on the bill. He would not say how much has been made.

The company, though, has repeatedly said that it lacks the ready cash to pay, and a court order forbids it from voluntarily selling assets to raise money.

Yukos had hoped to use a 35-percent stake in smaller oil company Sibneft to settle the 2000 back tax bill, but that hope dimmed after a court in the Far East region of Chukotka on Friday froze a 15 percent stake in Sibneft belonging to Yukos, Sibneft spokesman John Mann said Thursday.

Adding to Yukos' problems, tax authorities also have declared the company owes $3.3 billion for 2001 and large bills for other years also are expected. Analysts have suggested the company could be looking at a final bill of more than $10 billion.