Arrested oil tycoon resigns as Yukos head

Russian tycoon Mikhail Khodorkovsky, arrested on charges of fraud and tax evasion, has announced his resignation from Yukos, saying the move is a bid to save the oil giant from an escalating criminal probe that has seen top shareholders imprisoned and a large chunk of its stock frozen.

“As the leader, I must do all I can to free our work collective from the blow aimed against me and my partners,” Khodorkovsky, who turned Yukos into Russia’s largest oil producer, said in a statement last night. “I am leaving the company.”

Khodorkovsky’s resignation came nine days after he was arrested in Moscow amid a four-month-old investigation of the oil company that has dragged down Yukos shares, caused the Russian stock market to plunge and raised questions about Russia’s economic and political course.

The price of Yukos shares shot up by 3.9% in Moscow trading immediately after Khodorkovsky’s announcement, ending the day up 12% at €10.87. They are still more than 20% below their all-time high posted shortly before Khodorkovsky’s arrest.

Critics say Khodorkovsky was chosen as a target by President Vladimir Putin’s fellow ex-KGB officers in the Kremlin to curb his growing financial and political clout and avenge his funding of opposition parties.

His arrest and last week’s court decision to freeze 44% of Yukos’ shares stoked fears that prosecutors are laying the groundwork for a redistribution of state assets privatised after the 1991 collapse of the Soviet Union.

The often-dubious privatisation deals created tycoons, such as Khodorkovsky, who bought up state assets at rock-bottom prices, earning the contempt of their impoverished compatriots.

Putin and his ministers have denied that privatisation – considered at the time as a key way of preventing the Communists from returning to power – will be revisited. But Washington has warned that the escalating probe raises ”serious questions about the rule of law in Russia”. Germany, Russia’s largest trading partner, has also said it is watching the process closely.

In the statement, Khodorkovsky said “the situation that has taken shape today forces me to drop my plans to continue personal involvement in the development of the company”, which is finalising a merger with its smaller rival, Sibneft, to create the world’s fourth-largest oil company.

Khodorkovsky can be held until December 30, but prosecutors can seek further extensions just as they have with a top Yukos shareholder, Platon Lebedev, who has been jailed since July.

In the statement, Khodorkovsky said he was “certain that the highly professional, close team of experienced managers” will move the company forward. Russian media reported that American Steven Theede, in charge of Yukos’ day-to-day operations, is the most likely Yukos manager to succeed Khodorkovsky.

A Canadian lawyer representing Khodorkovsky appealed in Brussels for the European Union to take up the case when it holds a summit with Putin later this week.

Khodorkovsky, meanwhile, in an apparent dig at the Kremlin, said he plans to dedicate his future to his work as head of Open Russia, a foundation he created and whose aims he said include “building in Russia an open and truly democratic society”.