Khodorkovsky & Lebedev Communications Center

Morning Session.

The prosecution called Mr. Gitas Anilionis to the witness stand. Mr. Anilionis, mentioned frequently by some of prosecution's earlier witnesses, including Messrs. Kraynov, Khvostikov, Gulin, Zakharov and Ms. Koval, [Please link to their summaries] introduced himself as a former Executive Director of SP Russian Trust and Trade (SP RTT) and as current General Director of OOO Lon XXI.

Mr. Lakhtin began with questions about Mr. Anilionis's history with Mr. Lebedev. Mr. Anilionis testified that he knew Mr. Lebedev from the mid-80s, when both worked for Zarubezhgeologiya, a promotional and trading arm of the USSR Ministry of Geology. Mr. Anilionis joined Mr. Lebedev at MENATEP as Mr. Lebedev's deputy, but soon asked for work with more responsibility. He was appointed to manage SP RTT, where he worked until 1998.

Mr. Anilionis described SP RTT's business as registration of companies, accounting and financial services, and consulting. Mr. Anilionis confirmed that SP RTT employees served as directors for companies registered by SP RTT. Mr. Lakhtin demanded to know who the main client of SP RTT was and Mr. Anilionis named Bank MENATEP and Group MENATEP. Mr. Lakhtin needed to know who lead those entities and Mr. Anilionis named Messrs. Khodorkovsky, Lebedev, Nevzlin, Brudno and Shakhnovsky.

Mr. Anilionis was shown copies of documents showing that MFO MENATEP had as its shareholders Bank MENATEP, SP RTT and OOO AKRA. In turn, MFO MENATEP registered ZAO Rosprom. Mr. Anilionis explained that MFO MENATEP managed companies involved in ongoing privatizations, with that work being later transferred to SP RTT. Mr. Anilionis remembered that SP RTT helped to register Rosprom.

Mr. Lakhtin was ready to show to Mr. Anilionis a page from Mr. Kraynov's day planner. As Judge Danilkin informed the prosecutor that this document was not yet part of the record, Mr. Lebedev objected, asking why Mr. Anilionis was being shown someone else's day planner. According to Mr. Lebedev, prosecution should have ceased the opportunity to ask Mr. Kraynov questions about Mr. Kraynov's day planner when Mr. Kraynov was testifying in court.

After Judge Danilkin granted Mr. Lakhtin's motion, Mr. Lakhtin began reading from the page, seemingly deciphering Mr. Kraynov's shorthand, at the same time telling the court that Mr. Kraynov confirmed the various entries in his day planner. Mr. Lebedev, after examining the page afterwards, noted to the court that Mr. Lakhtin read entries that weren't in the document. Meanwhile, Judge Danilkin, before Mr. Krasnov could add his objections, reminded the prosecutor that Mr. Kraynov was never shown this daily planner in court. Mr. Krasnov told the court that Mr. Lakhtin's insistence that Mr. Kraynov identified these entries was entirely "baseless." Mr. Lakhtin, grabbing the case volume from the court's desk, mumbled that these documents came from case #18/41-03.

Regardless of what Mr. Lakhtin thought he saw in Mr. Kraynov's daily planner entries, Mr. Anilionis was unable to decipher Mr. Kraynov's shorthand. He told the court that he could guess what some of the items were, but did not want to make a mistake. This seemed enough of an answer for the judge, who told Mr. Lakhtin to move on to his next question. Before Mr. Lakhtin could do so, Mr. Lebedev reminded the court that Mr. Lakhtin was showing a 1997 daily planner to the witness. Mr. Lakhtin warned that he was ready to start reading the indictment, as he'd done on prior occasions, which gave the gallery something to laugh about.

Mr. Lakhtin asked Mr. Anilionis to comment on another document specifically on "registration expenses." Mr. Lebedev objected, asking the court where Mr. Lakhtin saw "registration expenses," when the document said "administrative expenses."

After a short break, Mr. Anilionis testified that SP RTT provided registration services for YUKOS-Moscow, YUKOS-RM and YUKOS-EP. He confirmed that requests to register these companies came from someone at YUKOS, but he did not remember from whom. Mr. Anilionis remembered that these companies had management functions. Mr. Lakhtin asked whether Mr. Anilionis participated in managing or servicing these companies. "No," Mr. Anilionis replied.

Mr. Lakhtin showed to Mr. Anilionis copies of documents containing Mr. Kraynov and Mr. Anilionis's names. The first document was a summary from member meeting of OOO AKRA, where both gentlemen were listed as holding equal shares of the company. [The meeting was to vote on a resolution to incorporate OOO TERREN. -Eds.] Mr. Lakhtin announced additional documents, while Mr. Anilionis was prompted by the court to take a seat. Afterwards examined these materials, Mr. Kraynov confirmed that he saw the protocol before and remembered that Mr. Kraynov and he were equal members of OOO AKRA. Mr. Anilionis explained that he did not remember that Mr. Kraynov and he got together in the City of Taldom to actually discuss this.

The defense objected when Mr. Lakhtin asked about purchase of YUKOS shares in 1995. They reminded the court that indictment covers 1998 through 2003. Mr. Lakhtin, on the other hand, insisted that he was helping the court "to verify the evidence." Mr. Anilionis briefly explained some aspects of YUKOS privatization.

Mr. Krasnov objected as Mr. Lakhtin continued to question Mr. Anilionis on pre-1998 events, but the prosecutor, interrupting Mr. Krasnov mid-sentence, began to argue that everything that happened before 1998 was a chain of events which led to crimes. Mr. Krasnov, after patiently listening to Mr. Lakhtin, told him that this will be the last time he will stay quite while Mr. Lakhtin interrupted him. Then he asked Mr. Lakhtin why he wouldn't question witnesses about Mr. Lebedev serving in the army or about Mr. Khodorkovsky working at the Komsomol. Judge Danilkin asked Mr. Lakhtin not to interrupt the opposing side.

Mr. Lakhtin would not back away from questions rooted in events that took place in 1995 and 1996. Answering Mr. Lakhtin's question about who owned majority of YUKOS shares during that period, Mr. Anilionis named Mr. Kraynov and Mr. Anilionis. This answer did not satisfy Mr. Lakhtin, so he asked who owned Bank MENATEP. Mr. Anilionis, finally getting the gist of Mr. Lakhtin's questions, replied that he was aware that Mr. Khodorkovsky and others controlled the bank.

Mr. Anilionis was familiar with Yukos Universal and thought that the company was established to manage movement of securities. About MQD International, Mr. Anilionis thought that Mr. Gulin was either its director or an authorized representative, with the company itself handling securities transfers. Mr. Anilionis testified that MQD International worked in the interest of YUKOS majority shareholders, among others.

Mr. Lakhtin wanted to know how YUKOS shares were paid for. His question, asked in the form of "How was the whole endeavor paid for?" prompted a puzzled look and a request by the judge to clarify the question. Mr. Lakhtin, admitting that he wasn't sure how to correctly phrase it, asked if YUKOS shares were paid for with "gold, diamonds, promissory notes or cash." Mr. Anilionis wasn't certain, but thought that some YUKOS shares were paid for with promissory notes.

Mr. Lakhtin questioned Mr. Anilionis about VNK ownership structure after it was privatized. Mr. Krasnov's objection that Messrs. Khodorkovsky and Lebedev were not charged with anything related to the subject was ignored by the court. Mr. Anilionis, looking at a table of VNK shareholders, testified that he knew the company names, but did not know how it was decided how many shares each company purchased. Mr. Anilionis, asked about loans made by Bank MENATEP for acquisition of VNK, told the court that he definitely did not have anything to say about that topic.

Mr. Lakhtin read and haltingly asked questions about letters sent by Messrs. Kobzar and Zakharov to Mr. Filimonov, proposing agenda items for a meeting of VNK shareholders. Mr. Anilionis testified that YUKOS asked SP RTT, which held VNK shares for YUKOS benefit, to propose a slate of directors, including several employees of SP RTT.

Protocol of the aforementioned VNK shareholders meeting followed. Mr. Anilionis was listed as one of 19 directors that were chosen. Mr. Anilionis did not remember whether he participated in all shareholder meetings, but told the court that votes could be made in absentia. Mr. Anilionis explained that SP RTT would get a packet of documents, describing proposed agenda items, as well as instructions on whether his and other SP RTT employees' presence was required. According to Mr. Anilionis, all voting instructions came from Mr. Gololobov.

Mr. Lakhtin announced another protocol of a VNK shareholders meeting, then sought to give it to Mr. Anilionis before defense and the court had a chance to examine it. Mr. Lakhtin was reminded by the court that witnesses were questioned for the court's benefit, meaning the court should be able to examine the document before the witness. Mr. Anilionis, after examining the document, explained that he did not attend the shareholder meeting, but attended Board of Directors meetings.

Mr. Lakhtin turned to protocols from meetings of VNK Board of Directors. Mr. Anilionis testified that he heard there was an exchange of VNK subsidiaries' shares, but he did not know all the details. Looking at two more protocols, Mr. Anilionis told the court that he did not remember seeing these, but voted "as he always did." Mr. Lebedev asked the court to find out where it said that Mr. Anilionis actually voted. Mr. Anilionis, looking over the documents, clarified that indeed he did not vote but only sent a letter with his opinion. Mr. Lakhtin demanded to know how Mr. Anilionis voted on the proposed share exchange in May 1999, but after Mr. Lebedev's objection, telling the court that Mr. Lakhtin was misleading the witness, that question was struck. Mr. Lakhtin kept pushing on Mr. Anilionis's voting record, but Mr. Anilionis continued to insist that voting instructions came from Mr. Gololobov.

Mr. Lakhtin, not shying away from using leading questions, asked how SP RTT may have been connected to Baltic Petroleum and South Petroleum. Mr. Anilionis, vaguely, remembered that someone, probably from Mr. Lebedev's office, asked SP RTT to acquire a couple of companies. Mr. Lakhtin was unsatisfied with "from Mr. Lebedev's office" and wanted to know where the initiative came from. Understanding Mr. Lakhtin's hint, Mr. Anilionis testified that all initiatives originated with Messrs. Khodorkovsky, Lebedev, Brudno and Nevzlin. Mr. Anilionis, answering additional questions, told the court that the aforementioned companies bought and sold crude oil. Mr. Anilionis testified that he was not aware of any arguments over utilization of the aforementioned companies.

Afternoon Session.

After lunch break, Mr. Lakhtin got deep into operational details of Behles Petroleum, South Petroleum and Baltic Petroleum. Mr. Anilionis, continuing with ambiguities and suppositions, testified that Behles was based in Switzerland and employed foreigners. Mr. Anilionis testified the Mr. Gusarov worked out Geneva. Behles Petroleum was headed by Peter Levonovich. [Our readers may want to look at Mr. Gulin's testimony from November 27 of last year. -Eds] 

Mr. Lakhtin, after asking the all-encompassing question about "the purpose of crude oil traders" and hearing back that it was [the difference in prices], began speculating about Messrs. Khodorkovsky and Lebedev's participation. "I suppose the policy and strategy in [this company] was developed by Khodorkovsky and Lebedev," Mr. Lakhtin stated as if asking a question. The gallery rumbled with disapproval. Judge Danilkin told the prosecutor not to ask these types of questions. Mr. Lakhtin argued that it was difficult to ask questions the right way and that he was asking questions they way he understood how. Mr. Anilionis, meanwhile, skirted a direct answer, telling the court that decisions were made by higher-ups.

After a short break to allow Mr. Lakhtin to decide what documents he wanted to question the witness about, the hearing resumed with Mr. Lakhtin announcing contract and contract addendums between Behles Petroleum and South Petroleum. Mr. Lakhtin, for the second time during the hearing, thought to deny defense the opportunity to examine the documents he was showing the witness. "They have a right [to do so]!" Ms. Kovalihina was heard whispering an exclamation. Mr. Krasnov, after examining copies, told the court that the document could not be considered to be a contract because it was missing price terms, which were essential. Meanwhile, Mr. Anilionis told the court that he was unfamiliar with the documents he was presented with. Mr. Lakhtin, pretending he did not hear the witness, asked whether the document illustrated Mr. Anilionis's testimony. The court struck the question.

Mr. Lakhtin wanted to know who was in charge of managing the aforementioned companies' funds. Mr. Anilionis testified that Messrs. Maruyev, Moskalets and Leonovich, among others. Mr. Lakhtin asked whether Mr. Lebedev was involved, but Mr. Anilionis did not know, telling the court that he remembered that Mr. Lebedev worked at YUKOS for some period of time, then left. Mr. Lakhtin asked if Mr. Nevzlin had anything to do with managing the funds. Mr. Anilionis told the court that Mr. Nevzlin, being responsible for security and marketing, was not connected with managing funds.

Mr. Lakhtin showed Mr. Anilionis a translation made by Ms. Zueva. In Mr. Lakhtin's interpretation of the aforementioned translation, funds were transferred to a number of companies, then were transferred back. Judge Danilkin asked Mr. Lakhtin if he heard him right, but Mr. Lebedev was quick to point out that Ms. Zueva's translations were suspect to begin with. Mr. Anilionis, looking at the document, also was surprised by how Ms. Zueva translated description of transaction he was familiar with.

After another break, Mr. Lakhtin was showing Mr. Anilionis copy of Behles Petroleum's balance sheet. Defense projected the document on the courtroom wall so that everyone could see the half-blank document, missing all the numbers. Mr. Lakhtin could not decide whether to go with Baltic Petroleum or South Petroleum next, but finally settled on Baltic Petroleum's auditor's report and financial statements for 1998. After these documents were examined and Mr. Lebedev noted mistakes made by an unknown translator, Mr. Khodorkovsky asked the court to look at the financial information in the document. Despite a turnover of close to $731 million USD, the company's profit was approximately $22 million USD, or close to 3%. Mr. Khodorkovsky anticipated an interesting conversation on the topic of embezzlement.

Mr. Anilionis described a sequence of trading, whereby YUKOS sold to Behles Petroleum, then Behles Petroleum sold to South Petroleum and Baltic Petroleum. According to Mr. Anilionis, everyone at YUKOS - management, treasury and shareholders - knew about profits made by the aforementioned companies and that dividend payments were made to those companies' shareholders.

Mr. Lakhtin showed another document to Mr. Anilionis. Mr. Lebedev noted that the document was not an original, did not have prosecution's verification stamps and was accompanied by a translation from an unknown translator. The transaction described was an assignment of claiming rights. Mr. Anilionis described it as a funds transfer from South Petroleum to Wellington Interests Ltd. A promissory note sales agreement between Baltic Petroleum and Arley Ltd. was described by Mr. Anilionis as payment using illiquid promissory notes. Every one of the documents shown, and there were several more to follow, was accompanies by Mr. Lebedev's objections to lack of authenticating identifiers and absence of translator's identity.

Mr. Lakhtin wanted to know if Peter Bond got paid anything. Mr. Anilionis testified that Peter Bond was paid $5 million USD for his services. Mr. Lakhtin asked for what services. "What do you mean what services? That was his company!" Mr. Anilionis was confused by the prosecutor's question.

As the clock approached 17:00, Mr. Lakhtin asked the court to adjourn, so that prosecution would have more time to prepare additional questions for tomorrow's hearing. Judge Danilkin reminded Mr. Lakhtin that there will not be a court session on Thursday, to give defense attorneys time to meet with their clients. [We hear that Judge Danilkin will set a rare hearing for this upcoming Saturday. -Eds.]

The trial will resume on Friday, February 26, 10:00 Moscow Time.