Russia finds Khodorkovsky guilty in second trial

A Moscow court on Monday found jailed tycoon Mikhail Khodorkovsky guilty in his second fraud trial, a judgement seen as a pivotal moment in Russia's post-Soviet history that upset rights campaigners.

Khodorkovsky and co-accused Platon Lebedev were convicted of embezzlement and money laundering, said judge Viktor Danilkin, dashing the hopes of Russian liberals the trial would show a new approach from Russian courts.

The pair were charged with embezzling 218 million tonnes of oil from Khodorkovsky's Yukos oil giant between 1998 and 2003 and laundering 487 billion rubles ($16 billion) and $7.5 billion received from the oil.

"This is an unjust verdict by a court that is not free," Khodorkovsky's lead lawyer Vadim Klyuvgant told journalists. "It is shameful for the country. We will appeal the verdict."

Amid chaotic scenes, only a handful of reporters were allowed into the courtroom for the verdict and judge Danilkin then requested even those journalists to leave as the rest of the verdict was read out.

"The court has established that M. Khodorkovsky and P. Lebedev committed embezzlement acting in collusion with a group of people and using their professional positions," said Danilkin in the judgement.

Both reacted impassively to the judgement in the glass-fronted defendants' cage in the packed courtroom, Khodorkovsky leafing through papers and looking into the air while Lebedev appeared to be reading a book.

Hundreds of supporters gathered outside the court shouted "Russia without Putin" and "down with the police state" and an AFP correspondent saw police arresting 20 people.

Klyuvgant said it was not clear when the final sentence would be delivered but said it was unlikely to be pronounced on Monday.

Once the country's richest man, now its most prominent prisoner, Khodorkovsky, 47, is already serving an eight-year sentence for fraud on charges his supporters insist were trumped up by the authorities.

But with his release scheduled for 2011, Khodorkovsky was put on trial last year on charges of money laundering and embezzlement that could see the head of the now-defunct Yukos oil giant stay in jail until 2017.

The verdict was watched as a possible indicator of Russia's future direction under Prime Minister Vladimir Putin and President Dmitry Medvedev, amid speculation that Putin is planning a return to the Kremlin in 2012 polls.

Liberals had hoped that an acquittal would send a signal to the West that Russia was serious about reform and displaying the independence of its judiciary under Medvedev.

"I expected this judgement. But all the same I am upset," Lyudmila Alexeyeva, one of Russia's best known rights defenders told the Interfax news agency.
"The judge would have had to have been a hero to have given an acquittal verdict."

Igor Yurgens, head of The Institute of Contemporary Development think tank set up by Medvedev when he came to power in 2008, had in an earlier newspaper interview called for an acquittal to help foreign investment.

"This is unfair. It does not instill hope for the future of our court reforms," he told RIA Novosti after the verdict.

The Moscow stock market fell briefly on the news but analysts said the verdict had been long priced in and indexes climbed back to former levels.

In the first major Western reaction, the German deputy government spokesman  said Berlin "has followed this trial critically from the start and will continue to watch how it develops with close attention."

Moscow's Khamovnichesky court had been due to start reading the verdict on December 15, but unexpectedly postponed the announcement without giving an explanation.

The next day Putin compared Khodorkovsky to US fraudster Bernard Madoff, jailed for 150 years, and observed that a "thief must be in prison" in comments decried by the fallen magnate's legal team as direct meddling.

Khodorkovsky hit back by launching his own lacerating attack against Putin in a newspaper article on Friday, saying he pitied a man who could only feel love for dogs.

The pursuit of Khodorkovsky has been the most controversial legal action of the post-Soviet era in Russia.

Like many other billionaires, Khodorkovsky made his fortune in controversial loans-for-shares privatization in the 1990s but his supporters say he turned Yukos into Russia's most transparent company.

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