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Last Updated: Wednesday, 16 June, 2004, 15:42 GMT 16:42 UK
Trial of Russian tycoon adjourned
Khodorkovsky arrives in court
Mr Khodorkovsky arrives in court.
The trial of Russian oil tycoon Mikhail Khodorkovsky on fraud, embezzlement and tax evasion charges has been adjourned.

The Moscow court adjourned proceedings to give a member of the defence legal team time to recover from eye surgery.

There was no immediate word on when the trial of the ex-boss of oil giant Yukos and a business partner would resume.

The defence argues that Mr Khodorkovsky is being pursued for political reasons, something the Kremlin denies, and says it expects him to be convicted.

Mr Khodorkovsky, thought to be Russia's richest man, was arrested last October and has been in prison ever since.

I personally do not see any other scenario apart from bankruptcy.
Stephen Dashevsky
Aton oil analyst
Supporters say he was arrested because he had funded opposition parties and indicated his interest in closer personal involvement in Russian politics.

This, say analysts, broke a tacit agreement with the Kremlin to stay out of politics and avoid investigation of his business affairs.

Mr Khodorkovsky is a leading figure among the so-called oligarchs - the super-rich business community that grew fat from the sale of state assets at knockdown prices in the 1990s.

President Vladimir Putin has denied that Mr Khodorkovsky is being punished for his political activities and for his failure to toe the Kremlin line.

'Show trial'

Mr Khodorkovsky is being tried alongside a key business partner, Platon Lebedev. If convicted, the men could face up to a decade in prison.

"They are going to be found guilty. We know the outcome," said a member of Mr Khodorkovsky's legal team, Robert Amsterdam. "It is a show trial to help the government expropriate Yukos."

Khodorkovsky supporters
Unfairly targeted? He has a few supporters who think so
Another of Mr Khodorkovsky's lawyers criticised the lack of an "open proceeding".

The courtroom provided room for 30 spectators while only 10 reporters were admitted to observe the trial, AFP news agency said.

Mr Khodorkovsky and Mr Lebedev were seated in a cage, as is the custom for defendants in Russia, the report said.

Lawyers for Mr Lebedev asked the court to release him from custody on medical grounds, Russian media reported.

Lawyers for Mr Khodorkovsky have also asked the court to allow him home for the duration of the trial.

Attack on Yukos

Yukos, the oil giant from which Mr Khodorkovsky was forced to step down, is also under threat.

It could face bankruptcy because of a 99bn roubles (1.9bn; $3.4bn) tax claim relating to unpaid taxes during 2000.

A Moscow court will rule on Friday on whether or not the bill must be paid immediately.

If it rules in favour of the taxation ministry, which wants the money right away, then Yukos may go under since another court has frozen the oil giant's assets.

Mr Khodorkovsky remains the biggest shareholder of Yukos, but his estimated wealth of $15.2bn, according to Forbes magazine, could be rapidly eroded if Yukos goes bankrupt.

Worthless shares?

Mr Khodorkovsky's supporters say the tax claim is part of the assault by the state on the oil giant and its owners.

Since his arrest, Mr Khodorkovsky and Yukos have attempted to draw a line between the two of them, hoping to limit the impact on the company of legal action against Mr Khodorkovsky personally.

The tax ministry's action against the company suggests this has failed, analysts say.

"I personally do not see any other scenario apart from bankruptcy," said Aton brokerage's oil analyst Stephen Dashevsky.

"The fate of Yukos and its key shareholders is now in the government's hands," an Aton research note said.

"The company's apparently imminent bankruptcy makes any analysis [of Yukos' operating prospects] largely meaningless at this point.

"We therefore advise investors to exit the stock at the earliest."

Yukos shares fell 12% in early trading on Wednesday following similar falls on Tuesday.

The BBC's Steve Rosenberg
"Most Russians couldn't care less about Mikhail Khodorkovsky"

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