Ex-Putin minister testifies in Khodorkovsky trial

* Gref, head of largest state bank Sberbank, testifies

* Kremlin critics say testimony is a “show”

* Jailed tycoon could face 22 more years in prison

By Aydar Buribayev

MOSCOW, June 21 (BestGrowthStock) – A former Russian minister
testified on Monday in the trial of jailed oil tycoon Mikhail
Khodorkovsky, becoming the first top Kremlin ally to appear in
the case which is seen as a test of promised judicial reforms.

Kremlin critics dismissed the appearance of German Gref, who
now heads Russia’s largest bank, as a bid to lend legitimacy to
politically charged proceedings against the former Yukos chief.

The trial of Khodorkovsky, who is serving an eight-year
sentence and faces up to 22 more years in prison if found guilty
in the new trial, is seen as a bellwether for Russia.

President Dmitry Medvedev has urged reforms to a judicial
system which he acknowledges is marred by corruption and
political influence, but critics say little has changed since he
took office in May 2008.

Gref, a former economics minister who is now CEO of
state-controlled Sberbank (SBER03.MM: ), spoke cautiously in court
and later avoided an answer when asked by reporters what he
thought about the charges against Khodorkovsky.

“To have an opinion about the charges it’s necessary to see
them and not repeat your words,” he said after the hearing.

Khodorkovsky, once Russia’s richest man, was originally
convicted of fraud and tax evasion in 2005. His supporters say
that trial was part of a Kremlin-driven campaign to punish him
for challenging Medvedev’s predecessor, Vladimir Putin, and to
tighten the state’s grip on the oil industry.

Yukos was bankrupted by tax claims and sold mostly to
state-run companies, deepening concerns in the West about the
rule of law and property rights in Russia.

Critics of Putin, now prime minister and still seen as
holding Russia’s reins, contend the new charges were trumped up
to keep Khodorkovsky in prison beyond a 2012 election in which
Putin has not ruled out a return to the presidency.

In the second trial, which began last year, Khodorkovsky is
accused of stealing $30 billion worth of oil from Yukos
production subsidiaries between 1998 and 2003 by paying them
less for the oil than it was subsequently sold for.

His lawyers wanted the court to call dozens of officials
including Putin to testify, part of an attempt to establish that
Yukos followed common practices that were accepted by the
government and did not break the law.

The judge has allowed only a few, including Gref, who was
economics minister during Putin’s presidency and later a state
property official. Industry Minister Viktor Khristenko is due to
testify on Tuesday.

Gref’s testimony came days after Medvedev, who has wooed the
West with talk of rights and democracy and a softer tone than
Putin, told global business leaders at a showcase economic forum
that Russia has changed.

Opposition politician Boris Nemtsov dismissed the trial and
the testimony as a farce. “In order to add some legitimacy to
the trial, they summon Khristenko and Gref to testify,” he said.

Defence lawyer Konstantin Rivkin said Gref helped
Khodorkovsky’s case by saying that an oil company would go
bankrupt if it sold oil on Western markets at internal prices.

But political commentator Yulia Latynina, a Kremlin critic,
said the testimony of prominent government allies was meant to
draw attention away from what she said was a predetermined
verdict. She called the trial “a show for the public”.

Stock Market Research

(Additional reporting by Alexei Anishchuk; writing by Steve
Gutterman; editing by David Stamp)

Ex-Putin minister testifies in Khodorkovsky trial