- The Washington Times - Monday, November 3, 2003

MOSCOW (AP) — Russia’s richest man, who was arrested last month on fraud and tax evasion charges, resigned yesterday as head of the Russian oil giant Yukos, saying he wants to protect the company from any further damage.

“I am leaving the company,” Mikhail Khodorkovsky said in a statement on Yukos’ Web site, citing only “the situation that has developed.”

“As a manager, I have to do all I can to pull our work force safely out from under the blows that are being directed at me and my partners,” he said.

The tycoon’s jailing on Oct. 25 amid a four-month investigation of Yukos caused the company’s shares to drop, leading the Russian stock market into a plunge and raising concerns about the country’s economic recovery.

The price of Yukos shares rose sharply immediately after the news of Mr. Khodorkovsky’s resignation. They shot up by 3.9 percent on Russia’s benchmark RTS index, Interfax reported.

Russian Finance Minister Alexei Kudrin, in an interview published yesterday, said the move by prosecutors to freeze shares in the embattled oil company was part of efforts to restore law and order. He predicted the probe will benefit the economy in the long run.

“One individual court case cannot revoke all the positive changes in the economy and society, everything that has already been done and is planned for development of the market in our country,” Mr. Kudrin, who is also a deputy prime minister, told the daily Kommersant.

Russia’s economy had grown for the past four years, and its stock market was thriving before it absorbed a series of shocks during the Yukos investigation and plunged 15 percent last week after the arrest of Mr. Khodorkovsky and the subsequent share freeze.

Analysts worried the actions could endanger Russia’s recovery from its 1998 financial crisis, and the decision by a court acting at the request of prosecutors to freeze 44 percent of Yukos shares drew sharp criticism at home and abroad. The U.S. State Department said the situation raised “serious questions about the rule of law in Russia.”

Mr. Kudrin predicted the market will recover once the Yukos affair is over.

“Speculators on the market, of course, will have their fun for a while, but after the final court decision it will fully recover and begin to grow,” Kommersant quoted him as saying.

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