The Independent | November 4, 2003
By Mary Dejevsky in Moscow

The so-called Yukos scandal surrounding Russia's biggest oil company took another dramatic turn last night when the head of the company, Mikhail Khodorkovsky, announced his resignation.

The so-called Yukos scandal surrounding Russia's biggest oil company took another dramatic turn last night when the head of the company, Mikhail Khodorkovsky, announced his resignation.

From the prison where he is being held in Moscow, Mr Khodorkovsky said that he was leaving his post forthwith and would devote himself to his political interests, chief among them trying to build democracy in Russia.

It was not immediately clear who would take over, but the office of the Russian prosecutor-general said Mr Khodorkovsky's resignation would not affect the criminal charges against him. Russia's chief "oligarch", remains in the Matrosskaya Tishina prison - in better conditions than most of his fellow inmates since he was snatched from his private plane by security service agents at a Siberian airport nine days ago.

He faces seven counts of fraud and tax evasion, with more charges likely to follow.

Although he has contributed to at least two political parties - one, Yabloko, left of centre, the other, the Union of Right Forces, more free-market - Mr Khodorkovsky has in the past said that his only personal political ambition was to bring what he called "real democracy" to Russia.

But there has been widespread speculation that he was preparing to stand for the presidency in 2008, even though some Russian observers question whether his political instincts are as well developed as his business acumen.

Mr Khodorkovsky's arrest has sent shudders through the Russian and international business community, which feared that it could presage open season on the "oligarchs" and inaugurate a much cooler investment climate.

It has also exposed divisions in President Vladimir Putin's administration about whether Russia's chaotic privatisation programme should be revisited and about the whole pace of economic reform. Mr Putin's chief-of-staff, Aleksandr Voloshin, resigned, precipitating the most extensive Kremlin reshuffle since Mr Putin came to office in 2000. His Prime Minister, Mikhail Kasyanov, also made clear his misgivings about Mr Khodorkovsky's arrest, as did Mr Voloshin's replacement, Dmitri Medvedev, yesterday. Both cited the harmful effect on investment and suggested that some solution short of arrest and imprisonment should have been found.

Reports in the British press at the weekend about a possible connection between Mr Khodorkovsky and Jacob Rothschild were also replayed in the Russian media, even though the suggestion that the Russian "oligarch" had appointed Mr Rothschild to take over his holding in Yukos if anything happened to him had been roundly denied by Mr Rothschild's foundation. In the past two years, however, Mr Khodorkovsky has solicited support for his business and political ventures among neo-conservatives in the United States and in the American Jewish lobby.

Russian reports said that the "so-called Jewish question" would be raised by the Israeli Prime Minister, Ariel Sharon, during his current, three-day visit to Moscow. By the "Jewish question" in this context is meant the fact that most of the prominent Russian oligarchs who have experienced difficulties with the authorities are Jewish. Sergei Gusinsky and Boris Berezovsky are in self-imposed exile abroad, having refused to make the choice between the fortunes they acquired from the Nineties' privatisations and political activity. Roman Abramovich has moved at least some of his fortune to London, and Chelsea Football Club.

One liberal Russian commentator brought this delicate subject out into the open yesterday, writing in the newspaper Izvestiya that it was time Russia stopped resorting to "xenophobia" - singling out "'malicious Chechens', 'people from the trans-Caucasus' ... 'oligarchs' and, of course, 'Jews'", when life became hard.

For all the support that Mr Khodorkovsky has had in the past week, it remains true that "oligarchs" - whether they are Jews or not - are deeply unpopular in Russia, where they are almost universally believed to have acquired their fortunes by dishonest means. However, it is also true that some "oligarchs" have been allowed more freedom to engage in political activity than others. Before buying Chelsea, for instance, Mr Abramovich was a very active governor of the eastern region of Chukotka. The problems seem to begin when they evince national political ambitions. Both Mr Berezovsky and Mr Gusinsky refused to trade their political ambitions for business success, as Mr Putin reportedly demanded, and went abroad.