Khodorkovsky & Lebedev Communications Center

Morning Session.

The trial resumed with Mr. Rivkin informing the court that defense will call to the witness stand Mr. Tagirzyan Gilmanov, former Executive Director of Yuganskneftegaz. After the preliminaries were out of the way, Mr. Miroshnichenko began Mr. Gilmanov's direct examination.

Mr. Miroshnichenko asked whether there were any reason due to which Mr. Gilmanov will not be able to testify objectively. Mr. Gilmanov assured the court there were none. Turning to his knowledge of Messrs. Khodorkovsky and Lebedev, Mr. Gilmanov testified that he knew the former as the head of YUKOS and met with him on a regular basis concerning the production subsidiary he headed. He knew Mr. Lebedev as well, but explained that after 1998, he rarely if ever saw Mr. Lebedev, but also thought of him as one of YUKOS managers.

Mr. Gilmanov testified that YUKOS was the majority shareholder of Yuganskneftegaz, and became the sole shareholder in 2001. YUKOS was a vertically integrated oil company, which was rational and necessary to manage the crude oil production and refining process.

Mr. Gilmanov testified that YUKOS-EP was Yuganskneftegaz's executive. Mr. Gilmanov examined the agreement on the transfer of executive functions to YUKOS-EP. He explained that substantively the agreement did not have any impact on the production company's capabilities and operations. Although he acted pursuant to a power of attorney issued by YUKOS-EP, he retained most of his previous functions, except for being limited into not entering into financial transactions of over a million USD without pre-approval and he did not remember an instance where any such request was denied. Otherwise, he and his team of professionals continued to be responsible for and implemented all company level decisions. According to Mr. Gilmanov, the executive functions transfer agreement in question was logical within a vertically integrated crude oil company.

Mr. Gilmanov confirmed that YUKOS had corporate rules, standards and instructions, including those establishing his functions and responsibilities. According to Mr. Gilmanov, he saw as his main responsibility ensuring a good business climate in the regions where Yuganskneftegaz operated. Mr. Gilmanov explained that Yuganskneftegaz always attracted more attention as the largest crude oil producer, accounting for 65% of the total output of YUKOS.

Mr. Gilmanov was surprised when Mr. Miroshnichenko asked whether Yuganskneftegaz had any other executives besides YUKOS-EP. He told the court that he did not know how that could even be possible. According to Mr. Gilmanov, while YUKOS-Moscow was the corporate center of the company there was not direct relationship between it and Yuganskneftegaz - the operating relationship was with YUKOS-EP only. He explained that all major decisions were formed "at the bottom" - his team developed projects and sent them up to YUKOS-EP, which usually approved them without many major changes.

Mr. Gilmanov testified that that Yuganskneftegaz functioned based on annual and monthly budgets. In addition to traditional costs - salaries, electricity and others - Mr. Gilmanov explained that Yuganskneftegaz required a lot of capital investment. The result was an annual crude oil production growth rate of between 16-18%.

Mr. Gilmanov explained the purpose of the executive monthly crude oil balance. According to Mr. Gilmanov, the document acted as a snapshot of the crude oil produced by the company during the previous month. The document served as the basis for the accounting department, which based its sales and revenue calculations on it. The balance was verified with documents provided by Transneft, which checked the amount of crude oil transferred into the pipeline system.

Mr. Gilmanov testified that the price at which Yuganskneftegaz sold crude oil covered the production costs. He confirmed that Yuganskneftegaz was profitable during 1998-2003.

Mr. Gilmanov explained "wellhead liquid." On average, a ton of liquid extracted by Yuganskneftegaz had about 65% water content and about 68 cubic meters of gas. According to Mr. Gilmanov, whatever it was that was extracted could not be called "market grade oil." Mr. Gilmanov explained that a strategy was implemented to protect the oil from arrest, which included YUKOS becoming the owner of "wellhead liquid." Mr. Gilmanov explained that the strategy was openly discussed with the government's representatives, with the emphasis on the fact that what was coming out of the ground was not a market grade product.

Prior to a short recess, Mr. Gilmanov testified that Yuganskneftegaz drafted audited financial reports on quarterly basis. PricewaterhouseCoopers was the production company's auditor. In addition to auditing, PwC provided consulting services, including training of the accounting department.

The trial resumed with Mr. Gilmanov describing expanded management meetings. He noted that these took place in the regions where YUKOS was present. Representatives from each link in a vertically integrated chain participated.

Mr. Gilmanov testified that his goal was to extract the crude oil, to process it to the GOST standard and to transfer it to Transneft. Crude oil pricing was responsibility of YUKOS-RM. Mr. Gilmanov testified that Yuganskneftegaz did not have a crude oil trading department. The production company did not have specialists who could trade crude oil, monitor the export market, and interact with wholesalers, logistic companies, customs officials and others. Mr. Gilmanov confirmed that Yuganskneftegaz did not have any costs related to transportation, customs and others. The company's budget did not have a line for these and no staff of specialists who could handle these matters.

Mr. Gilmanov confirmed that, on paper, Yuganskneftegaz had crude oil storage capacity of 3 days, but in reality it was no more than 2 and a half days. This amounted to about 300 thousand tons. Mr. Gilmanov examined the YUKOS/Yuganskneftegaz General Agreement. According to Mr. Gilmanov, it was understood that all of the crude oil will be purchased and there was never an instance when Transneft did not accept the crude oil from the production company because there was no purchaser.

Mr. Gilmanov confirmed that he signed some of the crude oil sales contracts on behalf of Yuganskneftegaz. He examined some of the ones found in the case materials and told the court that he did not recognize his signature on some of them. He explained that it was possible that one of his deputies could sign for him - such authority could be delegated by a power of attorney.

Mr. Gilmanov testified that he never had to implement orders which asked him to act outside his functions. He explained that there was too much respect to even consider asking someone to do something unlawful or inappropriate. He confirmed that no one physically and psychologically pressured him; otherwise he would have found another place to work. He knew nothing about an informal parallel management system, telling the court that it would have been impossible to keep it secret. He told the court that he had no idea how Mr. Khodorkovsky would have concealed his role at the company and he never heard of an organized criminal group within YUKOS.

Mr. Gilmanov told the court that there couldn't have been an embezzlement of 350 million tons of crude oil. According to Mr. Gilmanov, it was physically impossible. He explained that it could not have happened through a price difference - Yuganskneftegaz was always paid more than its production costs and had profit to cover the social responsibility. He testified that no one took crude oil without payment. According to Mr. Gilmanov, an allegation to the contrary was simply made up.

Mr. Lebedev had a couple of follow up questions. Mr. Gilmanov went over the technological process of getting the crude oil from the ground to Transneft. In detail, he explained the steps involved, what expenses were accrued and how those expenses were paid for.

Mr. Lebedev asked Mr. Gilmanov to explain why through 1996 Yugansk managed to dig itself a $1 billion USD "hole." Mr. Gilmanov explained that there was the drop in crude oil production rate and no one wanted to pay taxes. Yuganskneftegaz did not have a staff of tax professional. No one was asking for audited financial statements. The lack of understanding of the application of tax laws resulted in 70-75% tax rates and while no one was paying, the tax arrears were not going away, but continued to grow. Mr. Gilmanov, using the term "red directors" to describe the Soviet guard running the oil industry at the time, testified that oil company management simply did not consider tax payments a priority. Mr. Gilmanov made a note of telling the court that by 2001 all tax arrears were paid for and even described how a deputy of his came to his office to show a letter from the tax authorities informing Yuganskneftegaz that it had no tax arrears.

Mr. Gilmanov confirmed that the Yuganskneftegaz crude oil production rate doubled from 25 million tons to 50 million from 1998-2003. He explained that Yuganskneftegaz was profitable, but the profit was not significant enough to allow dividend payments.

Mr. Khodorkovsky had a few questions of his own. Answering his questions, Mr. Gilmanov, using Priobskoye Oilfield as an example, explained what Yuganskneftegaz invested funds in. In addition to investing into the oilfield itself, Yuganskneftegaz invested in local villages, road building, utilities and other related projects.

Mr. Khodorkovsky asked Mr. Gilmanov to remember whether during the criminal cases involving alleged tax law violations the authorities ever argued that crude oil was not sold and no taxes should be paid. Mr. Gilmanov explained that he was convicted for causing a legal entity to underpay profit tax. The argument being put forth by the government was that Yuganskneftegaz sold all of its crude oil - but for less than it could have, thus minimizing the taxes it paid. According to Mr. Gilmanov, the investigators and the prosecutors insisted that he was selling crude oil at too low of a price, but when he asked what price he was supposed to have sold the crude oil for he never got an answer. Even the price comparison sheet that investigators showed him had Yuganskneftegaz in the middle of the pack of 12 companies in price comparison, with price difference between the companies being insignificant. Mr. Gilmanov described how investigators tried to compare his average price to one shipment from a company for an unusually high price. But when he asked them to weigh a million ton shipment against a 50 million average, the investigators refused. Mr. Gilmanov told the court that with methods like these, he never admitted guilt, despite being convicted. Regardless, investigators concluded that all of the crude oil was purchased.

Mr. Lebedev asked whether the tax authorities knew that Yuganskneftegaz was paying taxes based on the profits. "Of course! That's what they told us we had to pay!" Mr. Gilmanov laughed.

Afternoon Session.

The trial resumed with Mr. Smirnov cross-examining Mr. Gilmanov. Mr. Smirnov was suspicious about whether there really wasn't enough profit to pay dividends. Mr. Gilmanov explained that there was profit. He explained that he was a Yuganskneftegaz shareholder, made presentations at the annual shareholders meetings, and he did not remember anyone raising questions on dividend payments - there was indebtedness to pay down.

Ms. Ibragimova asked Mr. Gilmanov to tell the court what section of the Criminal Code he was convicted under and what his sentence was. Mr. Gilmanov told the court that he received 2 years probation for violating Section 199 of the Criminal Code. Ms. Ibragimova wanted to know if the sentence made Mr. Gilmanov bitter and biased against law enforcement. Mr. Gilmanov assured the court that this was not the case and he was testifying objectively. "Look, when "the YUKOS case" started, we understood that directors will not be left on the sidelines... one way or another we'll be dragged in. Now, [after serving probation] my record is expunged and I prefer not to remember the whole episode," Mr. Gilmanov explained.

Ms. Ibragimova asked Mr. Gilmanov to look at a couple of documents, implying that he knew of these documents from the time he was Yuganskneftegaz's Executive Director. Mr. Gilmanov corrected the prosecutor, explaining to the court that the first time he ever saw these documents was when he was interrogated "in March of last year." Mr. Ibragimova read several statements from one of the document - a personal statement purportedly made by Mr. Gilmanov, attempting to attribute it to Mr. Gilmanov. He explained that the statements were not his and he never participated in any trial proceeding being described in those documents, as he told the investigator. Ms. Ibragimova played coy, telling Mr. Gilmanov that the prosecution did not know what he told the investigator, because there were no transcripts. "Of course there are, one was right there following the document," Mr. Gilmanov told her, referring to the case volume he was just shown.

Mr. Lebedev objected to Ms. Ibragimova continuing to ask questions based on a document which the witness testified he saw for the first time at the investigator's cabinet. Ms. Ibragimova grumbled something unintelligible.

Ms. Ibragimova continued pressing Mr. Gilmanov for commentary on the documents he had no knowledge of. Messrs. Khodorkovsky and Lebedev's objections to this prosecutorial tactic were met with indifference from the court. Mr. Gilmanov was surprised by the prosecutor's continued use of "Russian market" when discussing crude oil prices and told the court that he did not understand where "Russian market prices" could come from when there was not Russian market. Mr. Gilmanov told the court that he could not comment on documents containing information without citation to authoritative sources.

Ms. Ibragimova began asking questions about a Yuganskneftegaz annual shareholders meeting, reading from the minutes. "Concerning approval of transactions between Yuganskneftegaz and Tomskneft...," Ms. Ibragimova read. Mr. Lebedev commented that the text mentioned YUKOS, not Tomskneft. "If that's what you think I said - you better clean your ears, I said YUKOS," Ms. Ibragimova shot back, while the entire courtroom heard otherwise. Judge Danilkin urged calm.

Ms. Ibragimova attempted to convince Mr. Gilmanov that he attended that shareholders meeting, but he noted that his name was only included on the list of elected Board Members, which did not mean he attended the meeting. Ms. Ibragimova began arguing that, as a General Director, Mr. Gilmanov should have insisted that only disinterested shareholders could take place in a vote on the approval of transactions between YUKOS and Yuganskneftegaz. Mr. Lebedev objected, telling the court that the issue of "interest" was not on the agenda, while Mr. Khodorkovsky told the court that Mr. Gilmanov, as an Executive Director, had no powers at the annual shareholders meeting.

Predictably, Ms. Ibragimova motioned to read a portion of Mr. Gilmanov's transcript. As usual, no reference to material contradictions, just that the witness could not remember the names of those who headed YUKOS-RM. Judge Danilkin reminded the prosecutor that the witness confirmed the names after she reminded him. Ms. Ibragimova insisted. Mr. Rivkin told the court that defense would leave it to the court to decide whether the prosecution should read the transcript where Mr. Gilmanov mentioned Messrs. Bychkov and Brudno. Mr. Lebedev, on the other hand, objected, but was interrupted by prosecutor Lakhtin, who shouted that Mr. Lebedev was using incorrect language. Judge Danilkin asked Mr. Lebedev to sit down. Mr. Lebedev reacted with outrage, noting that for a year and a half he heard insults from prosecutor Ibragimova, without a single warning. He added that he knew what kind of decision the court will come to concerning the transcript.

Ms. Ibragimova read that portion of the transcript containing Messrs. Bychkov and Brudno's names. Mr. Gilmanov reiterated that he met with Messrs. Bychkov and Brudno, but they never discussed price issues - as was clear from the transcript.

After a short recess, the prosecution wanted to know about the crude oil auctions. Mr. Gilmanov explained that he did not know much about them, Yuganskneftegaz did not participate and he understood the auctions' purpose being to record a price for a particular lot of crude oil. Answering Mr. Lakhtin's question, Mr. Gilmanov testified that he did not discuss crude oil auctions with his colleagues from Samaraneftegaz or Tomskneft.

Mr. Lakhtin wanted to hear, once more, what positions Mr. Gilmanov held at Yuganskneftegaz. While the defense objected, the prosecutor demanded the court allow him to ask his questions. Judge Danilkin asked the prosecutor not to repeat what was already said.

Mr. Lakhtin accused Mr. Gilmanov of not looking out after the interests of Yuganskneftegaz's shareholders. He insisted that Mr. Gilmanov failed in his duties which were enumerated in the Yuganskneftegaz company by-laws. Defense objected, demanding the prosecutor produce the by-laws where these duties were allegedly enumerated. Judge Danilkin, who seemed to be growing impatient with the prosecutor, told Mr. Lakhtin to refer to the by-laws, but Mr. Lakhtin pretended not to hear the judge.

After spending some more time attempting to convince Mr. Gilmanov that he did not do enough for Yuganskneftegaz and the production region, even going so far as to state that Mr. Gilmanov's power of attorney was issued by an organized criminal group, prosecutor Lakhtin motioned to enter into evidence and to read into record interrogation transcripts of Mr. Parasyuk, who was Yuganskneftegaz's General Director prior to Mr. Gilmanov. Mr. Lakhtin insisted that Mr. Parasyuk was very ill and was unable to attend the trial. Mr. Lakhtin attempted to mislead the court, telling Judge Danilkin that while Mr. Parasyuk was questioned under case #18/41-03, copies of his interrogation transcripts were already available in the case file. That turned out not to be true. Mr. Rivkin noted that even the government's witness list from the case materials did not include Mr. Parasyuk's name. Mr. Lakhtin's motion was denied.

While prosecutor Lakhtin was waiting for more questions to materialize, Mr. Khodorkovsky asked whether Mr. Gilmanov was hired, promoted, and transferred to a new position because he was helping to cover up some sort of Mr. Khodorkovsky's crimes. Mr. Gilmanov testified that it was not true and was impossible. He explained that he had deep respect for Mr. Khodorkovsky, knew about him as a person with reputation in banking at the time he purchased YUKOS, and he was interested in working for him. When he was transferred in 2003, it was because his contract was up. He explained that he was very pleased by having Mr. Khodorkovsky's recognition, in transferring him to Moscow to head the YUKOS service block.

Mr. Lebedev asked Mr. Gilmanov whether PwC had access to Yuganskneftegaz financial statements, where company revenues were reflected. Mr. Gilmanov confirmed that the auditor had access to all documents and, as he mentioned earlier, the auditors visited Yuganskneftegaz on a regular basis. He explained that it would have been impossible to provide them with different information from quarter to quarter without getting caught.

Prosecutor Lakhtin's re-cross examination of Mr. Gilmanov devolved into a series of repetitive questions, interspersed with insults. Judge Danilkin was nudging the prosecutor to wrap it up, but Mr. Lakhtin remained undeterred. Having failed at convincing Mr. Gilmanov that he was an inadequate manager, who did not care about Yuganskneftegaz shareholders - although he was unable to refer to anything which would have shown that Mr. Gilmanov had such duties - the prosecutor accused Mr. Gilmanov of turning the blind eye on the plight of everyone because he was paid by Mr. Khodorkovsky. He insisted on having Mr. Gilmanov examine a document containing information on performance bonus payments to YUKOS upper- and middle-management, including on the amount of bonuses allocated to Mr. Gilmanov. Judge Danilkin insisted on the prosecutor explaining what the point of that exercise was, so prosecutor Lakhtin informed the court that bonus payments was how Mr. Gilmanov helped Mr. Khodorkovsky to embezzle funds. [We would note that what the prosecutor was screaming about is not found in the indictment, but remains one of Mr. Lakhtin's favorite tactics in insulting and threatening witnesses. -Eds.]

Meanwhile, Mr. Gilmanov told the court that he had difficulties commenting on documents which were not signed or verified by anyone. This prompted a sharp retort from the prosecutor, telling Mr. Gilmanov that it was not up to him to weigh the evidence. Judge Danilkin warned the prosecutor to refrain, but Mr. Lakhtin remained undeterred. He insisted that all documents were received by using appropriate legal means. Judge Danilkin shut the discussion down, which prompted Mr. Lakhtin to rebuke the judge for "not protecting the prosecution." That last comment prompted a round of ironic laughter from the gallery. Finally, Mr. Gilmanov was free to leave.

After Mr. Gilmanov left the courtroom, Mr. Khodorkovsky made a brief statement. He told the court that he wanted the court to note prosecution's incorrect actions.

Mr. Khodorkovsky explained that the prosecution, showing Mr. Gilmanov documents in the form of drafts made by foreign law firms - which were seized from confidential attorney files, was surprised to learn that Mr. Gilmanov never saw these documents in the form that they were presented. He thought it was inappropriate to show a witness confidential materials, although he would leave it to the court to decide, as it promised, on their admissibility.

Next, he asked the court to note that the prosecution attempted to convince the witness that a 1997 crude oil appraisal report, drafted for purposes of unrelated tax litigation, was actually applicable to an annual shareholders meeting from 1999.

Finally, Mr. Khodorkovsky told the court that the prosecution - at least prosecutor Lakhtin - remained stubborn in refusing to understand that a company could have as its executive another legal entity. This can be ascertained easily by opening up the Civil Code. Another thing the prosecutor could learn, by reading the Civil Code and the Law on Corporations, is that a General Director and, certainly, a General Manager acting pursuant to a power of attorney was not vested with authority to dispose of the company's profit. Only the company's shareholders could do so.

Next, Mr. Lebedev attempted to have Mr. Kupreichenko play back a portion of today's hearing where Ms. Ibragimova incorrectly stated Tomskneft instead of YUKOS when she was reading from a document being presented to Mr. Gilmanov. Judge Danilkin prevented Mr. Lebedev from initiating the play back and told him to move on with his statement.

Mr. Lebedev explained that he wanted the court to hear on the audio recording Ms. Ibragimova's falsification. Mr. Lebedev objected to the actions of the presiding judge, explaining that he stated on numerous occasions that the prosecution will insult witnesses before the court. Mr. Lebedev told Judge Danilkin that today the latter allowed the prosecution to continue to insult another witness. Mr. Lebedev told the court that he fully understood the court's attempts to cut short the prosecution's questions in order to allow the witness to depart as soon as possible. What he did not understand was why the court would allow a Russian citizen to be insulted in a Russian courtroom in the first place.

Mr. Lebedev barely had a chance to sit down when Ms. Ibragimova stood up, telling the court that she had a statement to make. She told the court that Mr. Lebedev's statements towards the prosecution have reached "a critical mass." She told the court that for the duration of today's hearing Mr. Lebedev directed insults at the prosecution. In addition, Ms. Ibragimova insisted to Judge Danilkin, promising to look up all of the instances in the trial protocol, that Mr. Lebedev continuously insulted the court throughout the duration of this trial. She explained that she previously warned Mr. Lebedev that, should he make one more insult, the prosecution will motion to have him removed from the courtroom. Telling the court that she thought everyone had enough, Ms. Ibragimova motioned to have Mr. Lebedev removed from the courtroom until the conclusion of the closing arguments stage of the trial.

Mr. Rivkin told the court that when there was nothing to say about the substance of the proceeding, attempts such as this one are made. Mr. Rivkin told the court that the prosecution gave plenty of reasons to fault them for incorrect behavior. He reminded the court that Section 9 of the Criminal Procedure Code - respect for the honor and dignity of individual - applied equally to both sides. However, when defense makes an effort and invites witnesses to testify, they invariably become subject to insults from at least one member of the prosecution team. Mr. Rivkin told the court that the entire defense team shared Mr. Lebedev's outrage at the prosecution's conduct, although he may have a bit more leeway in the way he expresses himself, due to where he sits in the courtroom. Mr. Rivkin asked the court to deny Ms. Ibragimova's motion and to ensure that everyone was subject to compliance with Section 9 of the CCP.

Mr. Khodorkovsky told the court that defense closely analyzed what courts consider insulting and have found that almost unanimously they consider "statements made in inappropriate form" to be insulting. However, "appropriate statements," while not being pleasant, were not insulting. Mr. Khodorkovsky made an offer for the prosecution to present the court with specific terminology used by Mr. Lebedev and promised that he will be able to present the court with an equivalent used by the prosecution, including on such words as "brazen," "criminal" and others. Mr. Khodorkovsky told the court that since the prosecutor failed to present the court with even one "statement made in inappropriate form," he objected to the prosecution's motion and asked for it to be denied.

Judge Danilkin, looking at the defense, asked whether anyone else had something to say. A chair scraped the courtroom's floor and prosecutor Lakhtin was yelling over the judge who was attempting to have him sit back down. Meanwhile, the prosecutor yelled that the fact they did not make statements concerning Mr. Lebedev's insults every day did not mean that they did not have something to say. Finally, Judge Danilkin was able to convince the prosecutor to sit back down.

Mr. Lebedev told the court that he understood Ms. Ibragimova's position. He understood that no one who makes incorrect statements during a public proceeding wants to get caught and be called on it. He noted that decent people, after making a mistake, correct themselves, apologize and explain to the court that they made a mistake. An example with Ms. Ibragimova, which he wanted the court to hear on the audio recording, was that she distorted a document by reading "Tomskneft" instead of "YUKOS." Mr. Lebedev told the court that it was extremely difficult to make such a mistake - too many different letters. Mr. Lebedev told the court that he immediately noted it - but instead of correcting herself and apologizing, prosecutor Ibragimova basically lied to the court then "told me to clean my ears." Mr. Lebedev told Judge Danilkin that he did not react when being told that he was being lied to and allowed the prosecutor to continue to lie to the court by insisting that she hadn't lied. At the same time, prosecutor Ibragimova was allowed to imply that Mr. Lebedev could not hear well. Mr. Lebedev told the court that if the correct manners were applied from the very beginning and the prosecution was made to understand the consequences of lying to the court, he would not have to keep pointing this out. Furthermore, Mr. Lebedev told the court that it was painful to watch the prosecution hurl insults at practically every Russian and foreign citizen who came to court. Mr. Lebedev identified the root cause of insulting defense and prosecution witnesses as the prosecutors hearing the testimony they did not like.

Mr. Lakhtin was up, telling the court that he fully supported his colleague. He told the court that Mr. Lebedev gave plenty of reasons to remove him from the courtroom during the trial which entered a second year. Once again, the fact that the prosecution did not raise this issue often did not mean there were no grounds for having him removed. Just as his colleague, Mr. Lakhtin insisted that Mr. Lebedev's tactless behavior reached a critical mass during the past few months. "A while ago I received good education and have good upbringing, which do not allow me, as a correct, intelligent person, to repeat those insults and other absurdities which [Mr. Lebedev] allows himself as a defendant and a Russian citizen.... His statements are directed at unjustified delaying of the trial and, [according to my analysis] are made only when witnesses provide incriminating testimony against [Messrs. Khodorkovsky and Lebedev]," the prosecutor stated with a straight face while everyone laughed at the "polite and intelligent" person that was speaking.

Judge Danilkin denied Ms. Ibragimova's motion, but warned the parties and Mr. Lebedev specifically to behave correctly. According to Judge Danilkin, Mr. Lebedev showed disrespect to the court and the prosecution by his earlier behavior. [Somehow, prosecutors Ibragimova and Lakhtin were not included in the warning. -Eds.]

Judge Danilkin informed the parties that Mr. Pereverzin will be brought in for questioning next Tuesday, August 31, while the Moscow City Court scheduled an appeal hearing on the extension of Messrs. Khodorkovsky and Lebedev's arrest for Thursday, September 2.

The trial will resume on Friday, August 27, 10:00 Moscow Time.