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Last Updated: Tuesday, 28 October, 2003, 10:41 GMT
Russia mulls meaning of tycoon arrest

By Nikolai Gorshkov
BBC Moscow correspondent

There has been a mixed reaction to the jailing of Russia's richest businessman, the head of Yukos oil company Mikhail Khodorkovsky.

His arrest on Saturday by armed federal security guards was swiftly denounced by the country's business leaders as damaging the trust recently established between business and powers that be.

Mikhail Khodorkovsky
Khodorkovsky's arrest has divided opinion
They appealed to President Vladimir Putin to rein in the law enforcement agencies, seen by many as acting arbitrarily.

But he refused, saying there would be "no horse-trading" over their work, and warning his ministers to stay out of the debate.

He said no-one should think he was above the law, no matter how many billions he had in his bank account.

But a leading Russian economic reformer and business manager, Anatoly Chubais, said it was exactly the selective approach of the law enforcement bodies that is putting in question the rule of law.

In view of Georgy Satarov, a former aide to the first Russian President Boris Yeltsin, President Putin adopted "a position of non-interference" into the Yukos affair because he is no longer in control of that fight".

The president's statement is a call for everyone to adopt his position: do not meddle in anything
Georgy Satarov
Former Yeltsin aide
The fight, it is believed, is between the old "liberal" guard of the Yeltsin era, and the new hard-line elite of ex-KGB associates of President Putin for control of the Kremlin.

Mr Satarov said the president's stance was "expected" as "lack of a position is part of the political style and strategy" of Mr Putin.

"The president's statement is a call for everyone to adopt his position: do not meddle in anything," Mr Satarov said on a popular radio show.

The Russian stock market plunged on Monday, and trading was temporarily suspended after shares dropped below a critical line.

Khodorkovsky's arrest serves as an unwelcome reminder of Russia's high country risk, questionable legal system and zero-sum game politics
Aton Capital brokers' research note
Yukos, by far the largest company on the Russian stock exchange saw six billion dollars wiped off its value.

But later in the day the stock market showed signs of mild recovery, and on Tuesday appeared to be steadier.

Analysts said the affair was unlikely to deter investors from doing business in Russia, but they will have to cautious.

"Khodorkovsky's arrest serves as an unwelcome reminder of Russia's high country risk, questionable legal system and zero-sum game politics," the Aton Capital brokers said in a research note.

All oligarchs should be put behind bars
Vadim Andreyevich
Pensioner
Russian papers went much further.

"The liquidation of important and independently minded players on Russia's political and economic arena continues," said the mildly opposition-minded Nezavisimaya Gazeta, "and it's getting tougher by the day. Who's next?"

Even the fairly loyal Izvestia newspaper suspects the law enforcement agencies are out to expropriate private property and plunge the country back into the era of bread queues and total equality, in poverty that is.

But many ordinary Russians, who were indeed impoverished by the wholesale privatisation of state assets, welcome Khodorkovsky's arrest as justice, at last.

Khodorkovsky is no angel, but he could not have abused the system without help from bureaucrats - they are so corrupt
Ivan
Student
"All oligarchs should be put behind bars," pensioner Vadim Andreyevich told the BBC. "They are thieves who robbed us".

But young people are not so sure.

"Khodorkovsky is no angel," said Ivan, an economics student, "but he could not have abused the system without help from bureaucrats - they are so corrupt. He has simply fallen out with them."

This falling out, many believe, is purely political.

By declaring his support for opposition parties, both left and right, Mr Khodorkovsky has jeopardised Kremlin's plans to have a more obedient parliament after the December elections.

The Kremlin is fighting back, says Eric Kraus, chief strategist at Sovlink investment bank, in order to stop powerful private interests from throwing a spanner in its works.


WATCH AND LISTEN
The BBC's Hugh Pym
"Others speculated a political motive"



SEE ALSO:
Analysis: The Yukos puzzle
27 Oct 03  |  Europe
Russia tycoon arrest concerns US
26 Oct 03  |  Business
Profile: Mikhail Khodorkovsky
25 Oct 03  |  Business


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