Grigory Rzheshevsky, deputy head of the Russian Federal Property Fund's Liabilities Department, told Moscow's Meshchansky court in a testimony that he had been supervising compliance with the terms of bidding for a 20-percent stake in the Apatit fertilizer company "This was a Murmansk Region property selloff."
Khodorkovsky and co-defendant Platon Lebedev are charged, among other things, with masterminding a scam to obtain the 20-percent Apatit stake for Volna, a subsidiary of their investment vehicle, Menatep Group. This latter company holds a majority stake in the Yukos oil giant.
In view of non-compliance with the terms of the investment agreement, the Russian Federal Property Fund filed a claim with a court of arbitration in an effort to terminate the deal, the witness said. The arbitration court declared the deal null and void, ruling that the Apatit stake be de-privatized, but the defendant had dispensed himself of the shares by then.
Menatep Group shareholders then sent a letter to the Federal Property Fund, offering to pay damages.
The Economic Development and Trade Ministry then drew up a $3.5-$4 bln bill to compensate for the losses sustained by the federal and regional coffers as the result of the fraudulent deal.
In 2002, Volna and the Federal Property agreed to settle the affair out of court, but their amicable agreement was later on declared null and void.
The Meshchansky Court has now adjourned, and will meet again Tuesday. Tomorrow's session is expected to begin with Khodorkovsky's side of the story about the Apatit privatization.
Following Monday's court session, Henrich Padva, on Khodorkovsky's defense team, said: "The Prosecution's witnesses have nothing to say. What they are saying testifies in favor of the defendants." He also expressed doubt about the credibility of some of the testimonies, dealing with events of more than a decade ago.
Earlier today, the Meshchansky Court had interrogated the first witness in the Khodorkovsky/Lebedev case-former Apatit CEO Anatoly Pozdnyakov.
Prosecutor Dmitri Shokhin produced evidence proving that the co-defendants had masterminded a scheme to obtain the 20% stake in Apatit.
Pozdnyakov's witness account, given during a preliminary inquiry, was then read out. It made Khodorkovsky conclude that the interrogation had been "rather unusual." He said that the investigator, himself misled, had been trying to mislead the witness when pointing out that the investments should be interest-free.
Investments are not interest-free, with the agreement obligating Apatit to issue and transfer 50 percent of shares, Khodorkovsky pointed out.
Pozdnyakov confirmed the fact that he had heard "from someone that Khodorkovsky had evaded taxes, sending money to off-shore zones." He said he knew this from the media.
On Friday, the first witness was interrogated for as long as eight hours. Given discrepancies in Pozdnyakov's testimonies in court and during the preliminary inquiry, Prosecutor Shokhin requested that the witness' initial account be read out.
Khodorkovsky's defense team and the man himself requested the court Monday that the rules for their interaction be modified. "The conditions of defense lawyers' conversations with their clients have changed. A police convoy won't allow lawyers to transfer documents to their clients during the proceedings," Padva said. He added that it made no sense for a lawyer to ask for a break every quarter of an hour, so as to be able to negotiate with his client.
Neither the court nor the defendants should rely on the in-house convoy instructions as long as these infringe on the constitutional rights of the Defense, Khodorkovsky said.
The presiding judge Irina Kolesnikova replied by saying that "the court does not object to lawyers communicating with defendants during breaks in court hearings. As for the transfer of documents to defendants, this has nothing to do with the court, but is under the police convoy's control."
