RUSSIA: President Vladimir Putin yesterday hailed the prosecution of Russia's richest man as a vital lesson to the so-called oligarchs that they were not above the law, but insisted there would be no reversal of the corrupt privatisations that created their fortunes.
The Yukos oil firm also replaced jailed billionaire Mr Mikhail Khodorkovsky as chief executive, naming US citizen and long-time oilman Mr Simon Kukes as successor to the tycoon and Kremlin critic who is charged with massive fraud and tax evasion.
The US and EU have asked why Mr Khodorkovsky in particular has fallen foul of Russia's prosecutor general, but Mr Putin rejected the suggestion that he and his hardline allies are persecuting a political opponent.
"Everyone should understand once and for all that they have to obey the law all the time, not just when they have been driven into a corner," Mr Putin said in an interview posted on the Kremlin website and shown in part on television.
Giving his first glimpse into the motivation for the Yukos affair, which has seen three top shareholders charged with economic crimes and a security chief with murder, Mr Putin said "a figure" in the case had offered to pay what he or the company had failed to in the 1990s, either in taxes or during the rigged privatisation of the firm's assets.
"Now concrete charges have been brought against him, and he says: 'OK, agreed, let me pay up now'. That kind of trade, that kind of deal, is not allowed," Mr Putin said, wagging his finger.
The ex-KGB man then quickly insisted that he was only stating the prosecutor's view, and that all the accused were presumed innocent until proven guilty.
Shares in Yukos, Russia's biggest oil firm, have fallen about 20 per cent since Mr Khodorkovsky was seized on his private jet 10 days ago, amid fears that "hawks" who followed Mr Putin from the security services to the Kremlin could cause havoc by reversing the murky privatisations of the 1990s.
"There will be no de-privatisation or revision of the results of privatisation, but everyone should learn to live by the law, and observe the laws of the country," Mr Putin said.
The European Commission said in a statement that it would press Mr Putin for "clarifications" on the Yukos affair at this week's EU-Russia summit in Rome.
"The Commission will recall the need for the fair, non-discriminatory and proportional application of the law by the Russian authorities," it said.
Billionaire financier Mr George Soros said Mr Khodorkovsky's arrest might spell the onset in Russia of "state capitalism, where all the owners of capital realise they are dependent on the state."
"Since practically everybody in Russia broke the law during the turbulent years following the collapse of the Soviet system, the Russian president can prosecute whoever he chooses," Mr Soros told the Moskovskiye Novosti newspaper, which Mr Khodorkovsky owns.
Mr Simon Kukes, the new chief executive of Yukos, said his predecessor's arrest would not derail the company, which has been hailed in the West as Russia's most transparent and efficient.
"Everything stays intact and we have a strong team," he said.
The new Yukos team, which includes two other Americans, promised to stick to a planned offer to buy out minority shareholders of oil firm Sibneft, so creating YukosSibneft, the world's fourth largest private oil firm.