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Arrest of Richest Russian Said Political

July 3, 2003

MOSCOW (AP) _ Opposition politicians and analysts said Thursday that the arrest of a billionaire for alleged privatization fraud appeared to be a warning from the Russian government to big business ahead of December’s parliamentary elections.

Authorities on Wednesday detained Platon Lebedev, a close partner of Russia’s richest man, Mikhail Khodorkovsky, on suspicion of defrauding the state of $283 million in the 1994 privatization of the Apatit fertilizer company.

Khodorkovsky, who according to Forbes magazine is Russia’s richest man with an estimated $8 billion, is chief executive of Russian oil giant Yukos, which is reported to be bankrolling a number of opposition parties.

Lebedev _ himself dubbed a billionaire by Forbes _ is chairman of the Menatep group, a holding company with assets worth a reported $30 billion, including 61 percent of Yukos.

When Russia’s vast assets were privatized after the fall of the Soviet Union, they were snapped up on the cheap by a handful of astute businessmen. These businessmen, known in Russia as oligarchs, played a big role in deciding policy under former President Boris Yeltsin. President Vladimir Putin has made it his goal to keep big businessmen out of politics and has vowed to get rid of oligarchs ``as a class.″

A Moscow’s court ruled late Thursday that Lebedev should remain in custody, Menatep spokesman Yuri Kotler said. He is being charged with embezzlement, fraud and failure to comply with a court decision, the Interfax news agency reported.

Kotler said the company was astonished by the detention of its chairman and considered the actions of law enforcers to be ``inappropriate.″

Analysts said the timing of the arrest, months before December’s parliamentary elections in Russia, suggested it was politically motivated.

``The Yukos group is rumored to be funding various groups opposed to the centrist government party. There is evidence to suggest that this incident is politically motivated,″ said Roland Nash, head of research at Renaissance Capital in Moscow.

Vladimir Lukin, vice speaker of the lower house of parliament and a member of the liberal opposition party Yabloko, agreed.

``I think you have to be a very naive person without much knowledge of our political demimonde not to believe that this is part of an intrigue,″ he said on Echo of Moscow radio.

Lebedev’s arrest came out of an investigation requested by lawmaker Vladimir Yudin, a member of the pro-Kremlin Fatherland-All Russia faction.

``If there are violations of law in privatization, we need to get rid of them, no matter how long ago they occurred,″ Yudin told Echo of Moscow on Thursday.

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