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November 1, 2013 10:21 pm
From Mr J Buchanon.
Sir, I refer to Neil Buckley’s excellent article “One day in the life of Khodorkovsky” (Life & Arts, October 26). I believe that the author has glossed over a significant event. The article suggests that Mr Khodorkovsky set up Menatep Bank from the proceeds of a small family business, which later generated sufficient profits for the acquisition of the Yukos assets. This seems even more incredible than Mr Khodorkovsky’s achievements in managing those assets.
When I was an investment banker in Moscow during the 1990s, it was reported that Mr Khodorkovsky had paid $300m for the Yukos assets in a state tender managed by Anatoly Chubais. By 2003, the company was worth in excess of $20bn in market capitalisation. A huge achievement by anyone’s standards.
The government understood that the price Mr Khodorkovsky paid did not reflect the assets’ fair value. Real value could only be achieved in the hands of exceptional people such as Mr Khodorkovsky. Indeed, this is what he went on to do. However, it is the origin of the $300m a young Mr Khodorkovsky was able to raise that I find more puzzling.
The way he has been treated is a travesty of justice. However, when Vladimir Putin came to power, he agreed not to revisit the privatisation process of the 1990s. It was implicit that the source of funds that Mr Khodorkovsky and others had used to acquire state assets would also not be revisited. Mr Khodorkovsky’s subsequent conversion and belief in corporate governance, combined with his political ambitions, fell foul of that agreement and the rest is history, I suppose.
J Buchanon, Hants, UK
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