Medvedev Orders Khodorkovsky Review as Putin Celebrates Win

Outgoing President Dmitry Medvedev ordered a review of guilty verdicts against Mikhail Khodorkovsky, once Russia’s wealthiest man, as Prime Minister Vladimir Putin celebrated winning a new six-year Kremlin term.

Prosecutor General Yuri Chaika has until April 1 to complete the review of cases against Khodorkovsky, 48, and his business partner Platon Lebedev, the Kremlin press service said today in an e-mailed statement. The order also relates to 30 other criminal cases raised by opposition activists at a Feb. 20 meeting with Medvedev.

The president, a former corporate lawyer who has promised to improve the rule of law and attract foreign investment, has said freeing Khodorkovsky wouldn’t be dangerous. The announcement is probably a personal initiative aimed at shoring up his position as he prepares to swap jobs with Putin on May 7, according to Olga Khryshtanovskaya, a senior member of the ruling United Russia party.

“This seems to be purely symbolic -- Medvedev is trying to do something he will be remembered for while he’s still president,” Khryshtanovskaya said today by phone. “Any legal review won’t actually be decided until Putin is back in the Kremlin and freeing Khodorkovsky isn’t something he supports.”

Arrested at Gunpoint

Khodorkovsky was arrested at gunpoint on the tarmac of a Siberian airport in 2003 on charges of fraud and tax evasion in what he called retribution for political opposition to Putin, who was then president. The Kremlin denied being behind the case. Khodorkovsky is serving a 13-year sentence, including a second round of charges that added theft and money laundering.

Investors have cited the Khodorkovsky case as an example of the failure to respect the rule of law in Russia. A decision to free Khodorkovsky may add 10 percent to the value of Russian stocks, Roland Nash, chief investment strategist at Verno Capital in Moscow, said today by e-mail.

“Markets would go wild,” said Nash, who manages $200 million. “But personally, I’ll believe it when I see it.”

Stocks headed for their highest level in more than seven months after Putin, 59, won 63.7 percent of yesterday’s presidential vote, with more than 99 percent of all ballots counted. The 30-stock Micex Index added 0.7 percent to 1,619.11 by 2:15 p.m. in Moscow, poised for its best close since Aug. 4.

‘Sit in Jail’

Putin has said Khodorkovsky has blood on his hands and “thieves should sit in jail.” Putin served as president from 2000 to 2008, during which time Khodorkovsky’s Yukos Oil Co. was bankrupted and sold, with state-run OAO Rosneft acquiring the bulk of its production and refining assets.

In May 2011, the Moscow City Court rejected an appeal by Khodorkovsky to overturn his conviction in the second case, which added six years to his initial eight-year sentence, while reducing the total by one year. The U.S. and the European Union said the verdict in the second trial was a step backward for judicial independence and would harm the investment climate.

“There are no grounds to view this as a positive step forward,” Yuri Schmidt, a lawyer for Khodorkovsky, said today by phone. “We need a clear signal for the Khodorkovsky case to be resolved and there’s no sign Putin has changed his position and would agree to free him.”

Anti-Government Demonstrations

Opposition groups have claimed Putin won yesterday’s election through fraud and are preparing to rally in Moscow this evening. Similar allegations in a parliamentary vote in December sparked the biggest anti-government demonstrations in a more than a decade in major Russian cities.

“If Putin wants to show he’s been elected to pursue new policies, the best way to demonstrate that would be to let Khodorkovsky out of jail,” said Schmidt. “Unfortunately he’s caught up in his emotions and I’m not optimistic.”

Putin’s spokesman, Dmitry Peskov, said the order to review the convictions was under the competency of the current president, declining further comment.

Mikhail Fedotov, the head of the presidential council for human rights, said Medvedev’s decision was correct. “This is a continuation of the president’s policies,” he said by phone.

Medvedev, 46, has been promised the prime minister’s job, in return for ceding the Kremlin to Putin. A senior Medvedev adviser last month questioned his ability to serve as premier, saying he discredited himself by not seeking a second term.

Medvedev wouldn’t be “very successful in the job” because Putin’s allies in the Cabinet would “tear him apart,” Igor Yurgens said in a Feb. 17 interview, abandoning his support for the president for the first time publicly.

Yurgens, who heads a research institute set up by Medvedev, said the Russian president should abandon plans to become premier and make way for the man he fired last year as finance minister, Alexei Kudrin, who would do a better job.

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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