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Last Updated: Monday, 7 July, 2003, 16:17 GMT 17:17 UK
Tycoon shrugs off Putin rift
Mikhail Khodorkovsky
Mr Khodorkovsky is keen to play down any divisions with Putin
Russia's richest man has attempted to play down any conflict with President Vladimir Putin over last week's fraud inquiry.

Mikhail Khodorkovsky, the chief executive of Russian oil giant Yukos, was summoned for questioning last week by Russian prosecutors over the 1994 privatisation of a fertiliser company.

"As a businessman, I would of course not argue with the president or his administration if it were said to me that any aspect of my non-business activities was unacceptable to the political leadership," said Mr Khodorkovsky on Monday.

Mr Khodorkovsky's business partner, Platon Lebedev, was arrested as part of the same inquiry and later charged with theft of state property in connection with the privatisation.

Many of Russia's richest business men have made billions from the chaotic sell-off of state firms in the years following the collapse of the Soviet regime.

Mr Khodorkovsky, who made his comments in an interview with the radio station, Moscow Echo, added that he blamed intrigue inside the Kremlin for the fraud enquiry.

"In my opinion we are seeing the start of a power struggle between different factions in the entourage of Vladimir Putin."

Criminal investigation?

Separately, the state oil company Rosneft has called for a criminal investigation into its rival Yukos, according to reports in the local Russian press.

The business daily, Vedemosti, quoted a prosecution spokesman as saying that Rosneft's demand would be "examined carefully".

Many investors perceive the firm's conflict with the Prosecutor's Office as a political move designed as a show of force
BKS brokerage

The two companies have fallen out over production-sharing agreements and the construction of rival pipelines to China and Japan.

In the midst of the uproar, Yukos managed to report better-than-expected results, reassuring investors alarmed by the enquiry.

On Monday, Yukos said that its net profits for the first quarter of 2003 has increased to $1.27bn (762m) from $462m a year ago.

"The company performed better than the market expected, and there's no way these current problems can affect its financial performance," said Steven Dashevsky, oil and gas analyst at Aton brokerage in Moscow.

Easing of tensions?

Mr Khodorkovsky's interview with Moscow Echo was interpreted as an attempt to ease relations with Mr Putin.

There has been speculation that the legal action against Mr Lebedev is a warning to Russia's business elite against closer involvement in politics ahead of December's parliamentary elections.

Platon Lebedev
Platon Lebedev is a major shareholder in Yukos
Mr Khodorkovsky is seen as a target because he has donated campaign funds to two opposition reformist parties, Yabloko and SPS, which will compete with pro-Kremlin parties in the election.

Adopting a conciliatory tone, Mr Khodorkovsky said that he believed Mr Putin would win a second term in the elections.

"But who is going to form the second echelon of his team, that today is the question," he added, referring to political intrigue in the Kremlin.

He told Moscow Echo that the Kremlin clique - which he declined to name - felt threatened by Yukos, which is independent of state control.

"Many investors perceive the firm's conflict with the Prosecutor's Office as a political move designed as a show of force," said a local Russian brokerage, BKS.

Oil giant

Mr Lebedev, who still enjoys Mr Khodorkovsky's support, is head of Menatep Bank, the largest shareholder in Yukos.

Earlier this year Yukos agreed to merge with Sibneft to become the world's fourth largest oil producer.

Mr Khodorkovsky has stressed that the deal would be unaffected by the fraud enquiry.

The combined company would be the largest oil firm in Russia, controlling a third of the country's oil output, and with a market value of about $35bn.

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