Sberbank's Gref, Former Economy Minister, Testifies in Khodorkovsky Trial

OAO Sberbank Chief Executive Officer German Gref, Russia’s economy minister under then-President Vladimir Putin for eight years, testified today in the second trial of jailed former billionaire Mikhail Khodorkovsky.

Khodorkovsky, who built OAO Yukos into Russia’s biggest oil company until his arrest in 2003, questioned Gref from inside the defendants’ cage in the Khamovniki court in western Moscow over the legality of oil-pricing tactics used by Yukos and its subsidiaries.

Former Prime Minister Mikhail Kasyanov last month testified in support of Khodorkovsky and his former business partner Platon Lebedev, who are already serving eight-year sentences for tax evasion and fraud. They are now on trial in Moscow for stealing 350 million tons of oil from Yukos before it was seized and sold by the government to recover more than $30 billion in back-tax claims.

Yukos traded oil with its units at below-market prices, following a common practice used by all Russian crude producers, Kasyanov said in his testimony in May.

Gref said his responsibilities as minister didn’t include “inspections” of corporate finances. Still, he said he would have been informed if other officials had uncovered theft by executives at a company as big as Yukos. Russia’s tariff system for oil would explain why Yukos acquired crude from its units at below-market prices, Gref said.

Gref, 46, left the government in 2007 to take over state- run Sberbank, Russia’s largest lender. Sberbank shares were up 3.9 percent to 83.20 rubles at 12:53 p.m. in Moscow, valuing the company at about $58 billion.

To contact the reporter on this story: Lucian Kim in Moscow at lkim3@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.