TOPICS > Economy

Jailed Khodorkovsky Resigns As Head of Yukos

BY Admin  November 3, 2003 at 3:35 PM EST

Khodorkovsky said in a statement on Yukos’ Web site that cited “the situation that has developed” as the cause of his resignation, ”I am leaving the company.”

The tycoon’s Oct. 25 jailing amid a four-month-old investigation into Yukos caused the company’s shares to drop and led the Russian stock market into a 15 percent decline last week.

The price of Yukos shares rose sharply immediately after the news of Khodorkovsky’s resignation, shooting up by 3.9 percent, Interfax reported.

Many analysts viewed Khodorkovsky’s announcement as good news for Yukos.

“Khodorkovsky wants the company to distance itself from him personally and for its operational activity not to stall since this requires his participation,” Konstantin Reznik of Alfa-bank told Reuters.

After his arrest, a Russian court acting at the request of prosecutors last week froze the 44 percent of Yukos shares owned by Khodorkovsky and his business associates.

Robert Amsterdam, a lawyer acting on behalf of the oil magnate, accused Russia of trampling on the rule of law in arresting his client.

He told reporters Monday there is “a cancer that is growing on the Russian body politic. That cancer is authoritarianism. That cancer is a complete and total disregard of the rule of law. That cancer includes the most aggressive attack on the legal profession that Russia has seen in many, many years.”

Russian Finance Minister Alexei Kudrin, in an interview published Monday, defended the prosecutors’ decision to freeze shares in the oil company and predicted the probe into Yukos will benefit the economy in the long run.

Kudrin said the court “was motivated not by economic expediency but by the law.” He told the daily Kommersant, “The judicial branch is doing its business in terms of the restoration of law.

“Speculators on the market, of course, will have their fun for a while, but after the final court decision it will fully recover and begin to grow,” Kommersant quoted him as saying.

Days earlier, Russian Prime Minister Mikhail Kasyanov sided with pro-business interests when he said he was “deeply concerned” about the freezing of Yukos stock.

“The arrest of shares of a private company that is traded on the market is a new phenomenon, the consequences of which are hard to define, since it’s a new form of influence,” Kasyanov said Friday on Russian television.

President Vladimir Putin’s new chief of staff on Sunday urged prosecutors to consider the impact on the economy of their actions.

“Our colleagues [state prosecutors] should probably consider all the economic consequences of measures they take,” Dmitry Medvedev said on television.

Putin accepted the resignation of former chief of staff Alexander Voloshin last week. Voloshin had played a key role in the privatization of former Soviet state industries.

Last week, U.S. State Department spokesman Richard Boucher said the Bush administration regarded the jailing of Khodorkovsky and the freezing of company stock, as raising “serious questions about the rule of law in Russia.”