Ex-Yukos boss blasts fraud charges
From CNN Moscow Bureau Chief Jill Dougherty
 |  Khodorkovsky listens during a court session in Moscow, Friday. |
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 Interior ministry officers seal offices inside the Yukos headquarters.
 How some Russians became billionaires.
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MOSCOW, Russia (CNN) -- Russia's richest man Mikhail Khodorkovsky has returned under guard to court to reject all charges against him and the company he used to head, Yukos oil.
Rebutting prosecutors' allegations of fraud, tax evasion and embezzlement, he called the charges against him a "clumsy attempt to write off on me the mistakes that were permitted in the law on privatization."
As for Yukos, "the company paid not less but in fact more taxes than many other companies," Khodorkovsky said, "making use of breaks allowed by the law legally and in limited fashion." His comments in a Moscow courtroom on Friday were quoted by Russia's Interfax news agency.
Yukos' tax bills are not part of Khodorkovsky's trial but the billionaire businessman nevertheless tied them to his case, calling demands by tax authorities for an initial $3.4 billion in back taxes "disgraceful and illegal."
"This demonstration of power, indifferent to the law, is highly dangerous for our country's prospects," Khodorkovsky said.
If convicted, Khodorkovsky and co-defendant Platon Lebedev, another major Yukos shareholder, could be sentenced to 10 years in prison.
"The authorities are prosecuting me for political reasons. The accusations are not true," Lebedev told the Moscow court from the metal cage where he and Khodorkovsky sit, Reuters reported.
He did not say who he believed was behind their trial.
Both men have already spent significant time in jail under pre-trial detention. Khodorkovsky was arrested in October 2003; Lebedev in July of that year.
The prosecution alleges Khodorkovsky headed a criminal group that "wished to bring harm to the government" by plotting to buy shares in a company that was being privatized by the Russian government back in 1994.
The Russian Property Fund was auctioning off a 20 percent share of the country's largest chemical fertilizer producer, Apatit.
Prosecutors claim that, unknown to the government, all bids were backed by a holding company Khodorkovsky owned called Menatep.
One company was declared the winner but it, along with two other runners-up, pulled out after winning.
Instead, the company which had offered the lowest bid won the auction for Apatit with the help, prosecutors charge, of a false letter from a bank controlled by Khodorkovsky.
The winner, the "Volna" company, was obliged to invest $283 million in two installments into Apatit but it never made the first payment.
When the court forced the company to pay, Volna allegedly transferred the money for one day only. Volna then, according to the charges, diverted its shares into shell companies.
In all, Khodorkovsky and Lebedev face 11 charges on seven articles of the Russian Criminal Code.
On Thursday, after the prosecutor read the charges aloud in the courtroom, Khodorkovsky and Lebedev said they wanted to comment in more detail on the charges at Friday's hearing.
Defenders of Khodorkovsky say the case is politically rigged to remove him from any influence in the company.
They say the Kremlin is carrying out a vendetta against Khodorkovsky because of his efforts to fund opposition political parties and challenge the government on the building of crucial oil pipelines.
Yukos, meanwhile, is involved in its own problems. The firm must pay tax arrears that ultimately could reach $10 billion, a step the company claims could plunge it into bankruptcy.
Khodorkovsky offered to give up his shares in Yukos in order to save the company from bankruptcy but the government has not responded to the offer.
A justice ministry official Thursday was quoted as saying Yukos had begun to pay back part of the $3.4 billion it owes for 2000.
