Khodorkovsky & Lebedev Communications Center

The trial resumed with Mr. Lebedev informing the court that he'll make his best efforts to ask as many questions as he could of Mr. Golubovich and will only identify those documents that have not yet been announced. Because Mr. Golubovich needed to leave before 14:00, Mr. Lebedev would have additional documents to present to Mr. Golubovich when the latter returns from London, as he promised.

As Mr. Lebedev resumed cross-examining Mr. Golubovich, the witness testified that he was aware that Russia's Anti-Monopoly Committee gave YUKOS permission to consolidate 100% of all outstanding shares of Yuganskneftegaz, Samaraneftegaz and Tomskneft. Further, Mr. Golubovich testified that the purpose of the aforementioned consolidation of shares was for YUKOS to become a complete vertically-integrated oil company. One of the goals was to improve operations management at each production subsidiary. After 2000, part of the consolidation strategy was to make YUKOS more attractive for outside investors. As Director of Corporate Finance, Mr. Golubovich participated in the aforementioned consolidation and worked on achieving goals identified by YUKOS management. Mr. Golubovich declined to answer some of the questions, citing to lack of memory or lack of documents that he could comment on.

Next, Mr. Lebedev returned to the May 5, 2008 interrogation transcript and asked Mr. Golubovich if investigator Timofeyenko in fact showed him the 127 separate documents as written in the transcript. Mr. Golubovich answered this and all other questions related to the transcript by telling the court that due to the length of time that passed he had difficulty remembering, but if it's written then it happened. Meanwhile, Mr. Lakhtin interrupted and told the court that the witness fully affirmed everything and Mr. Lebedev was looking for ways to revise prior testimony.

Mr. Lebedev questioned Mr. Golubovich on the substance of the loan transaction between Bank MENATEP and several western banks. Mr. Golubovich testified he knew that in late 1997, Group MENATEP provided Bank MENATEP with a 30% block of YUKOS shares to help Bank MENATEP secure financing for share purchase transactions. Further, Mr. Golubovich knew that Bank MENATEP loaned proceeds from sales of those shares to YUKOS so that the oil company could purchase a controlling stake in VNK. Prior to Mr. Golubovich leaving YUKOS in 2001, VNK was shown on YUKOS' balance sheet.

Mr. Lebedev asked Mr. Golubovich to explain what "collection rights," "Bank MENATEP assets" and "YUKOS liabilities to Bank MENATEP" meant, but Mr. Lakhtin objected and Judge Danilkin struck Mr. Lebedev's question. Mr. Lebedev explained that Mr. Golubovich authored numerous books about finances and economics and should be allowed to answer the question. Mr. Lebedev asked what the prosecution meant by writing in the indictment "assets of Bank MENATEP were spent." Mr. Golubovich had no idea.

Mr. Golubovich testified that one purpose for which YUKOS began acquiring collection rights to Bank MENATEP was to use them to offset its own liabilities before the bank. Mr. Golubovich explained that these acquisitions were made at a 50% discount through companies controlled by him.

Mr. Lebedev asked questions about the state of Yuganskneftegaz finances. Mr. Golubovich did not know that Yuganskneftegaz paid tax on its profits. Asked about dividends, Mr. Golubovich forgot the answers he gave to investigators. With the transcript before Mr. Golubovich, Mr. Lebedev asked whether Mr. Golubovich could state with certainty that Yuganskneftegaz never paid dividends. Mr. Lebedev asked whether Mr. Golubovich was aware that Yuganskneftegaz had $2 billion USD in net income for 2004. Mr. Golubovich was not. Mr. Golubovich knew that Yukos-EP was the managing company for all YUKOS production subsidiaries and was authorized by the Anti-Monopoly Committee.

Mr. Lebedev, showing an excerpt from the indictment, asked Mr. Golubovich to explain to the court whether, in 2001 as the indictment alleges, Kenneth Dart made public accusations and filed any complaints against Mr. Lebedev that the latter was stealing crude oil. Mr. Golubovich testified that he wasn't aware of anything that had to do with Mr. Dart after 1999. [YUKOS and Mr. Dart settled their differences in late 1999. -Eds.]

Mr. Golubovich testified that he was aware that Messrs. Khodorkovsky and Lebedev were charged with embezzling crude oil and VNK subsidiaries' shares. He learned this information from the media and not from investigators who interrogated him. Mr. Lebedev asked if investigator Ganiyev showed Mr. Golubovich copies of Yuganskneftegaz financial statements when discussing "the disappearance of profits." Mr. Golubovich did not remember.

After a short break, Mr. Krasnov, thorough a meticulous re-examination of Mr. Golubovich's testimony, provided Mr. Golubovich with an opportunity to once again confirm his earlier testimony that the VNK share exchange was necessary in order to protect the subsidiary shares. [Mr. Krasnov reminded Mr. Golubovich that even Mr. Lakhtin used a phrase "diagram illustrating protection of shares" on January 19 when questioning him. -Eds.] Mr. Golubovich confirmed that he had a direct connection to the exchange and did not deny that he told investigators as early as 2004 that the purpose of the exchange was to protect Tomskneft shares. However, he continued, he thought that shares were not returned quickly enough once the threat had passed. In any event, he was very much aware of the battle Birkenholz waged against VNK and YUKOS.

Mr. Golubovich was unable to explain how his earlier testimony that Deputy Minister Gref was the one advocating for the shares to be returned squared with a letter to Mr. Khodorkovsky sent by Mr. Gref in August 1999. Attached to that letter was an agreement on steps required to be taken for VNK to receive subsidiaries shares.One of the provisions specifically stated that until legal threats by Birkenholz were terminated, the Ministry of Federal Property had the right not to demand repurchase of shares. Mr. Krasnov reminded Mr. Golubovich that Birkenholz's lawsuit was terminated in February of 2001, about a year and a half after Mr. Gref's letter was mailed. Faced with all of this, Mr. Golubovich answered that he was not a lawyer and could not comment. Mr. Krasnov commented that, like it or not, Mr. Golubovich's testimony contained two mutually exclusive premises.

Mr. Golubovich did not know of the existence of a document titled "Taking Tomskneft from under Mr. Khodorkovsky's control." After reading through the document, Mr. Golubovich told the court that the document was a bit strange and could have been drafted by someone on Mr. Rybin's team. Mr. Krasnov explained to Mr. Golubovich that the prosecution was the one to add the document to the case file.

Mr. Krasnov asked Mr. Golubovich to explain to the court which testimony it should take into account about the MCO valuation report - the one from January 19 when Mr. Golubovich testified that YUKOS did not have a goal to lower the price of Tomskneft shares and that at the end of 1998 Tomskneft and Achinsk shares were not traded, unlike YUKOS shares, or the one from January 26, when Mr. Golubovich characterized the MCO valuation report as a way to "cover the exchange" and "to match the Tomskneft shares to the number of YUKOS shares we had on hand." Mr. Golubovich insisted that his January 26 testimony did not contradict his January 19 testimony, but clarified it and expounded on it. But Mr. Golubovich admitted that he was not aware of anyone contesting the MCO valuation.

After Mr. Krasnov read part of the order authorizing search and seizure at the offices of OAO Russian Investors, he attempted to ask questions based on what investigator Shumilov alleged in the order and what was in the indictment, general allegations being that Messrs. Aleksanyan and Gololobov, through, Mr. Golubovich, pressured Russian Investors employees to sign various exchange agreements. Judge Danilkin struck Mr. Krasnov's questions. Finally, Mr. Krasnov asked whether either Mr. Khodorkovsky or Mr. Lebedev ever pressured Mr. Golubovich to sign exchange agreements. Mr. Golubovich confirmed that they never did.

Mr. Lebedev took over for Mr. Krasnov. His questions returned to the Birkenholz attack on VNK. Asking about the court decision behind the arrest of Tomskneft shares, Mr. Lebedev inquired if Mr. Golubovich had any explanation about why, in order to satisfy a claim stemming from the purchase of 6% of Achinskiy Refinery shares, the court would arrest 38% of VNK's shares. As Mr. Golubovich remained silent, Mr. Lebedev rephrased the question and asked whether 6% of Achinsk's shares were equivalent to 38% of Tomskneft's shares. Mr. Golubovich declined to answer. Mr. Lebedev asked whether Mr. Aleksanyan's note, as Mr. Golubovich argued earlier, explained that all legal threats to VNK's shares had automatically passed after a decision by the Supreme Commercial Court. Mr. Golubovich admitted the Mr. Aleksanyan's note did not contain this kind of language.

Mr. Lebedev asked whether Mr. Golubovich knew the time period for which the prosecution made various allegations against the defendants. Mr. Golubovich did not. Mr. Lebedev asked whether Mr. Golubovich was aware that during that period a controlling block of Yuganskneftegaz shares was removed from YUKOS' balance sheet and sold by court bailiffs. Mr. Golubovich did not.

Next, Mr. Lebedev asked whether Mr. Golubovich knew anything about YUKOS' purchase of ZAO Rus'. Mr. Golubovich testified that at the time it was one of the best resorts in Sochi. Mr. Lebedev asked if Mr. Golubovich knew anything about Rosneft purchasing the resort for 10 kopeks [at the YUKOS bankruptcy auctions].

Mr. Lakhtin interrupted, demanding to know what these questions had to do with the trial. Mr. Lebedev calmly explained that this was about YUKOS' assets. Judge Danilkin asked Mr. Lebedev to continue.

"Why was it sold so cheaply? Did something happen? Did it burn down?" Mr. Lebedev continued, and then asked if Mr. Golubovich knew anything about how YUKOS assets were auctioned off.

Mr. Lakhtin interrupted, this time arguing that it was obvious that the defense had no more questions. He demanded for the court to stop Mr. Golubovich's cross examination.

Mr. Khodorkovsky addressed Mr. Lakhtin's most recent outbursts and took upon himself to clarify to the prosecutors why Mr. Lebedev was asking about assets YUKOS used to own. He explained that in addition to prosecuting, the prosecutors were responsible for making sure that the victims were compensated for damages suffered. In order to do that, someone had to find out what happened to the property which was purchased with YUKOS' funds, as the witness just stated, funds alleged to have come from sales, amongst other things, of embezzled crude oil. "We are trying to establish: What happened to these assets?!" Mr. Khodorkovsky concluded.

As Mr. Lebedev was asking a question about Group MENATEP's purchase of YUKOS collections rights from a number of foreign banks, Judge Danilkin announced that it was time for Mr. Golubovich to leave.

After Mr. Golubovich left, Mr. Lebedev filed a motion asking the court to exclude from evidence seven interrogation transcripts, including one of Mr. Golubovich's from April 9, 2008, as being made in violation of the Criminal Procedure Code. Mr. Lebedev explained that each of the interrogations listed was conducted by investigator Nikandrov. However, the case file contained a protocol copy from a search and seizure conducted by investigator Alyshev at the Volgograd office of SP RTT, with Mr. Nikandrov listed as one of two participating witnesses. Mr. Lebedev cited Article 61 of the CCP, which explicitly forbids an investigator from working on a case where he or she previously acted as a participating witness. Mr. Lebedev pointed out that this procedural violation was committed by none other than investigator Alyshev, who, after becoming the lead investigator on case #18/41-03, included Mr. Nikandrov into his investigative section. In addition, investigator Nikandrov, fully aware that the case file contained procedural documents listing him as participating witness, failed to withdraw from participating in the investigation. In support of his motion, Mr. Lebedev cited the Criminal Procedure Code commentary written by Mr. Bastrykin, the Chairman of the Investigative Committee, in which he states that no additional proof was needed to show that the investigator was interested in the outcome - the presumption of the lack of objectivity was enough for automatic withdrawal.

The prosecutors asked for a copy of Mr. Lebedev's motion and asked the court to adjourn until Monday, when they would respond. Judge Danilkin granted their request.

The trial will resume on Monday, February 1, 10:30 Moscow Time.