RUSSIA: Russian stocks plummeted yesterday after President Vladimir Putin rejected business leaders' pleas to help free Mikhail Khodorkovsky from jail, telling them to stop the "speculation and hysteria" surrounding the fate of the country's richest man.
The main Russian bourse closed more than 10 per cent down on the first day of trading after Mr Khodorkovsky's arrest on fraud charges, and his Yukos oil company, the country's biggest, lost a fifth of its value on reports that US energy giants ExxonMobil and ChevronTexaco had suspended talks on buying a stake in the firm.
Despite seeing the rouble also slide against the dollar, Mr Putin flatly rejected calls from Mr Khodorkovsky's fellow "oligarchs" to discuss his alleged involvement in more than $1 billion worth of fraud and tax evasion.
"There will be no meetings, and no bargaining about the work of the law enforcement agencies," he said. "I would like everyone to stop the speculation and hysteria on this issue." With a parliamentary election in December and a presidential poll due next March, Mr Putin sounded a note reminiscent of his first-term vow to submit Russia to a "dictatorship of the law".
"Everyone should be equal before the law, irrespective of how many billions of dollars a person has in his personal or corporate account," Mr Putin said. "Otherwise, we will never teach and force anyone to pay taxes ... and defeat organized crime and corruption." Most analysts say hardline figures in the Kremlin and General Prosecutor's office are punishing Mr Khodorkovsky (40) for breaking an informal pact that magnates made with Mr Putin in 2000, whereby the Kremlin agreed not to investigate the murky sources of the tycoons' wealth if they stayed out of politics.
Mr Khodorkovsky, however, openly funds opposition parties and is rumoured to be eyeing a run for the presidency in 2008. He was seized by special agents on his private jet on Saturday and flown from Siberia back to Moscow to face charges.
Mr Anton Drel, a lawyer for the billionaire, said yesterday that he had been denied access to his client. Justice Ministry officials said Mr Khodorkovsky, who was being held in a five-man cell at a notoriously overcrowded jail, would soon be moved to a different detention centre.
Mr Putin, a former KGB agent, did offer some solace to Russia's angry tycoons, saying there would be no mass revision of the quick-fire sales of Soviet assets that created a handful of billionaires almost overnight.
"I consider it necessary to underline, as regards the case under investigation, that there will be no generalisations, analogies or precedents, especially in connection with the results of privatisation," Mr Putin said.
Most political commentators offered a damning assessment of Mr Khodorkovsky's arrest, which came after a series of raids at offices affiliated to Yukos, and even a children's nursery funded by the firm.
"The prosecutor's office is not able to make any charges since, as yet, no evidence has been found. That is why they resort to force, to at least show that they are strong," said Mr Igor Bunin, head of Moscow's Centre for Political Science.
"I do not rule out that later on someone will have to bear responsibility for that. Investments will go down, markets will sink."
Moscow's United Financial Group bank said Mr Putin had "made his worst political mistake to dateEveryone is a loser, very much including President Putin himself."
The Aton Capital brokerage said the Yukos case - which has now seen three senior shareholders charged with financial impropriety and a security official accused of murder - could damage Russia's recently improving investment climate.
Mr Gleb Pavlovsky, an image-maker who helped Mr Putin rise to power, painted a bleak picture of the situation and the mindset of the hard-liners who, he said, are forming an ever-tighter circle around Mr Putin, with the aim of controlling "the centre of the country".
"It's clear that a political show trial is being prepared. This is a Stalinesque phenomenon."