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#22 - JRL 7260
Businessmen ask Putin to defend post-Soviet gains
By Ron Popeski

MOSCOW, July 22 (Reuters) - Russia's business magnates, in a new appeal to President Vladimir Putin published on Tuesday, urged him to safeguard post-Soviet economic gains amid a tough legal probe into oil giant YUKOS <YUKO.RTS>.

The appeal was printed by Kommersant daily as YUKOS chief executive Mikhail Khodorkovsky said his company was strong enough to pull through the legal action that began with the arrest of a major YUKOS shareholder and personal ally.

Khodorkovsky, Russia's richest man and a backer of Putin's liberal opponents, is widely assumed to be the chief target of the legal action, which many say was inspired by Kremlin hawks ahead of parliamentary and presidential elections.

A Moscow court is to rule on Wednesday whether to release the YUKOS shareholder, Platon Lebedev, in detention since early July on charges relating to a privatisation deal tied up in the 1990s in the post-Soviet carve-up of state assets.

The legal tussle has raised questions about whether the 1990s selloffs, which turned a handful of businessmen into billionaire "oligarchs", would be subject to intrusive review.

The appeal, also signed by human rights activists, was the second issued to the Kremlin leader and called for a "social pact" to consolidate a decade of change. But, like the first letter, it made no direct reference to the YUKOS row.

"In (the pact), the state would assume responsibility for entrenching the results of change in the country, including defence of democratic institutions and the process of privatisation," the letter said.

"In turn, the business community will take on social and ethical responsibilities," it said, including a commitment to uphold transparency, root out corruption and pay taxes.


The Russian stock market ticked up for the third session in a row on Tuesday as market players bet Lebedev would be released on Wednesday and tensions over YUKOS would ease.

"The mood on the market has obviously improved," said NIKoil trader Vladimir Chkhikvadze. "There is hope that the situation concerns only YUKOS and will not spread to other Russian companies."

A market note by Renaissance Capital said the new letter from industrialists contained what amounted to concessions and was further grounds for optimism that the row would soon end.

"This could represent the mea culpa from industry that we have been looking for since this whole mess began, and, perhaps, the necessary olive branch to government," it said.

Economy Minister German Gref stuck to the government line of opposing any review of privatisations liable to upset markets.

"But one should bear in mind: there is no clear line between the revision of history and investigation of crimes," he told Vedomosti daily.

"If there were crimes in the privatisation process, no one will prevent their investigation before the expiry period is over," he said, referring to Russia's 10-year statute of limitations.

Many observers see the row as a struggle between one Kremlin camp loosely linked to the security forces and a second close to the administration of ex-president Boris Yeltsin.

Putin has said little about the case, but has criticised as excessive the detention of suspects in economic crimes.

YUKOS is also subject to a tax investigation. Investigators conducted an aggressive search of its premises this month.

Khodorokovsky has warned that a protracted campaign against business interests will chase investors away and prompt vast, new outflows of capital.

"We will stand firm. We are a big company, can hire lawyers and defend our people, even if they are imprisoned," he said in comments printed by the weekly Moskovskiye Novosti.

"We are figures of political significance for both Russia and the West," he said, and the security services would be careful when dealing with them.

(Additional reporting by Olga Popova)

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