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Russian oligarch fears Kremlin campaign

Russia's richest man, Mikhail Khodorkovsky, said the criminal investigation into his oil giant YUKOS was orchestrated from the Kremlin, and he feared more police action against his company . A Moscow court refused to release a key business ally, billionaire Platon Lebedev, who was arrested on charges arising from a 1994 privatization deal. Khodorkovsky, a multi-billionaire, is seen by many as the real target of the police action because of his suspected political ambitions . He says Lebedev's detention and a probe into YUKOS's affairs has been orchestrated from the Kremlin. Lebedev is a key shareholder in Yukos. The affair has triggered a sharp fall in YUKOS shares, which have lost 20 per cent of their value or US$7 billion over the last three weeks, and has unsettled investors who had been enjoying a rare period of political calm and post-Soviet growth. Business leaders have urged President Vladimir Putin to reassure investors, but the Kremlin leader has made little direct comment on the YUKOS case beyond describing the detention of suspects in economic crimes as excessive. The tussle has raised prospects of police scrutiny of sell-offs during Russia's post-Soviet carve-up of state assets in the 1990s in which a handful of entrepreneurs made fabulous wealth overnight to become today's billionaire "oligarchs". Many analysts say the action specifically targets Khodorkovsky, who funded both the Communist Party and the liberal party opposition to Putin. Other analysts say the row reflects a power struggle in the Kremlin between a liberal faction of remaining allies of former president Boris Yeltsin and Putin's new backers with roots in the security forces. (Reuters, 7/25/03)

Ronald Hilton - 7/30/03