Khodorkovsky & Lebedev Communications Center

On Tuesday the trial resumed with defense concluding Mr. Zubkov's cross examination. Mr. Zubkov continued to discuss details of his work on the YUKOS audit and some of the specifics PwC encountered and analyzed. When questioned by Mr. Khodorkovsky, a common thread in Mr. Zubkov's testimony was that no one at PwC had any reasons to question the subject matter of any particular audit or disclosures made by the company management. Topics covered included sales of crude oil at intra-company prices that were well below those in Amsterdam, Mr. Shakhnovsky's explanation of the VNK shares exchange and PwC memorandum on Behles Petroleum, Baltic Petroleum and South Petroleum. According to Mr. Zubkov, none of these topics raised the read flag of materiality when PwC was preparing its annual auditor reports.

When Mr. Khodorkovsky turned to questions about PwC's recall of all YUKOS audits, Mr. Zubkov had a chance to examine the letter notifying Mr. Rebgun of the aforementioned recall. Examining the reasons for recall, as they were stated in the letter, Mr. Zubkov ended up concluding the opposite of what was in the letter: Mr. Zubkov testified that he was not aware of any facts that would suggest that Messrs. Muravlenko, Ivanenko, Kazakov and others were not granted beneficiary interest in YUKOS shares for their services in developing YUKOS. Mr. Zubkov confirmed that, aside from those facts showing affiliation, he was not aware of any additional facts which would have shown control over domestic traders that YUKOS was consolidating. Finally, Mr. Zubkov was not aware that YUKOS ever purchased or paid for third party obligations before Bank MENATEP. Instead, Mr. Zubkov reiterated what he testified about last week - YUKOS purchased Bank MENATEP collection rights for approximately $191 million USD.

On Wednesday, the prosecution called their witness from out of town. She was Olga Dmitriyeva, current Director of Finance at Tomskneft, a post she held since early 2002. Leading direct questioning, Ms. Ibragimova focused squarely on a three-tranche loan made by YUKOS Capital S.a.r.l. to Tomskneft in July and August of 2004. [On March 9, 2010, Commercial Court of Tomsk Region began hearings in an enforcement proceeding, wherein YUKOS Capital S.a.r.l. is seeking enforcement of an arbitration award issued by the International Court of Arbitration at the International Chamber of Commerce of over 7.2 billion Rubles against Tomskneft, arising from this loan agreement.] While Ms. Ibragimova's questions sought to portray the loan in an unfavorable light, Ms. Dmitriyeva's testimony, combined with copies of loan agreements and accompanying documents, confirmed that the loan was initiated and approved by Tomskneft's sole shareholder, YUKOS, and was authorized by the company's management - YUKOS-EP. Furthermore, Ms. Dmitriyeva confirmed that Tomskneft needed the funds to pay for ongoing expenses, including worker salaries.

On Thursday, in testy exchanges resulting from prosecution's response to defense's motions filed on March 2, the gallery heard Judge Danilkin tell Mr. Krasnov that the latter's opinion was of no interest to the court. Another surprise was the emergence of Mr. Shokhin to question prosecution's witness Stanislav Zaitsev, a former PwC manager who worked on YUKOS-related matters from 1996 through 2002. After a short question session, punctuated by questions covering broad topics and not meant to elicit any specific testimony, Mr. Shokhin motioned to read Mr. Zaitsev's transcripts. Mr. Krasnov's objections were met by Mr. Shokhin's insistence of prosecution's prerogative - both concerning a subjective evaluation that Mr. Zaitsev's testimony contained "contextual contradictions" and the fact that investigators chose to include Mr. Zaitsev's transcript in the case file meant that his testimony was material.

Mr. Zaitsev's testimony, elicited by Messrs. Khodorkovsky and Lebedev, provided the court with detailed overview of Mr. Zaitsev's work on location at Yuganskneftegaz and on the Isle of Man, where he worked on a project involving Baltic Petroleum and South Petroleum. Mr. Zaitsev, despite insisting that he could not analyze the term "embezzlement" from a legal perspective, nevertheless testified if he was to take the literal meaning, no one ever told him that anyone embezzled crude oil from Yugansk and, furthermore, during his work on Yuganskneftegaz he never uncovered any facts pointing to crude oil embezzlement. In addition, Mr. Zaitsev confirmed the auditors knew that revenues reflected in financial statements were a direct result of crude oil and petroleum products sales, all from the crude oil produced by the YUKOS production subsidiaries. Asked if Messrs. Khodorkovsky and Lebedev asked any of the auditors to conceal any information from the YUKOS board or anyone else, Mr. Zaitsev testified that, while he could not speak for everyone else, he was never asked by anyone to conceal any information.

In a short Friday session, Messrs. Khodorkovsky and Lebedev filed statements, focusing on Ms. Dmitriyeva's testimony and prosecutions lack of professionalism in handling the case. Also on Friday, prosecution's unidentified witness was a no-show. However, the court was give prosecutors an opportunity to argue for admitting transcript testimony of Ms. Petrosyan, a former associate at the ALM Feldmans law firm, into record, as Ms. Petrosyan informed the court that she would not be able to return from Germany because she was staying with her seriously ill son. Although the court granted prosecution's motion, the transcripts would be read next Monday. Mr. Lebedev asked for an early adjournment in order to have a bit more time to get well from a cold.

The trial will resume on Tuesday, March 16, 10:30 Moscow Time.