Khodorkovsky & Lebedev Communications Center

Bio:

Mr. Rybin was a shareholder and a managing director of East Petroleum HandelsGes. m.b.H. Prior to East Petroleum, Mr. Rybin worked at Tomskneft. In 1995 and in 1997, East Petroleum and Tomskneft signed joint venture agreements to develop two large oil-fields for which Tomskneft held exploration license. In 2002, an arbitration panel in Vienna, Austria, found the first of the aforementioned agreements to be invalid because it was a result of a deliberate conspiracy between Tomskneft and East Petroleum's management to defraud Tomskneft and to siphon its assets. Similarly, a year later and arbitration panel in Brussels, Belgium, found the second agreement to be invalid on similar grounds. Mr. Rybin and East Petroleum played a key role in a raider attack on VNK. Using a previously concluded agreement between VNK and Birkenholz [a company affiliated with VNK management and East Petroleum. -Eds.] for purchase of Achinskiy Refinery shares, valued at US$22 million, and Birkenholz's claim against VNK, East Petroleum developed a plan titled "Removing Tomskneft from M. Khodorkovsky' Control." [The Birkenholz/VNK agreement was later found to be null and void. -Eds.] Under the plan, to satisfy enforcement of Birkenholz claim, an arrest was placed on VNK's Tomskneft shares. Despite the value of Birkenholz's claim being a little over US$20 million, an arrest was placed on shares valued at over US$100 million. In a move to protect Tomskneft from a raider attack, VNK swapped those shares for YUKOS shares. After Russia's Highest Commercial court affirmed that VNK/Birkenholz agreement was null and void, the swap was reversed.

Testimony dates:

September 30, October 1, October 19 and October 20, 2009.

When questioned by the prosecution:

In an unsuccessful bid to discredit defendants, the prosecution used Mr. Rybin's rambling testimony in a slimy attempt to connect Messrs. Khodorkovsky and Lebedev to separate murder trials against Messrs. Pichugin and Nevzlin. [Mr. Rybin was the prosecution's key witness in the trial of Aleksey Pichugin, an employee of YUKOS corporate security department. Mr. Rybin accused Mr. Pichugin of organizing assassination attempts against him. Mr. Pichugin's trial was widely condemned as a politically motivated farce that was meant to put pressure on some of the former YUKOS shareholders and managers. Those views were further confirmed when again played a role of prosecution's key witness in a trial against Mr. Nevzlin, held in absentia. Mr. Nevzlin was sentenced to a life in prison. -Eds.] Instead, the courtroom saw in Mr. Rybin an angry and bitter pawn, attempting to even a score voicing slanderous accusations in an attempt to get back at YUKOS for clamping down on a fraudulent relationship between Mr. Rybin and Tomskneft's prior management.

Mr. Rybin testified about events that took place prior to 1998. He did not have direct knowledge of events that the prosecution alleged took place during the time period covered by the indictment, 1998 to 2003. Most of Mr. Rybin's testimony focused on airing grievances against YUKOS for terminating the aforementioned joint venture agreements.

With frequent prompting by the prosecution, Mr. Rybin made frequent mention of several assassination attempts made on his life, despite these being irrelevant to the charges. When questioned even on barely relevant topics, such as "average crude oil world market prices," Mr. Rybin did not have any answers.

Despite admitting that he never met Mr. Khodorkovsky, and met Mr. Lebedev once, the prosecution readily accepted Mr. Rybin's opinions on the defendants' roles in YUKOS as fact. Some responses were particularly bizarre, such as when, answering another irrelevant question, Mr. Rybin told Mr. Lakhtin that he thought in 2002 VNK should have been valued at over US$3 billion, because crude oil was selling for US$150 in 2007.

Citing Article 281 of the Criminal Procedure Code (CCP), the prosecution filed a motion to read transcripts of Mr. Rybin's testimony. Despite not alleging any material contradictions, as required under CCP, Mr. Lakhtin got the court's permission.

Mr. Rybin's questioning by Mr. Karimov focused on events taking place prior to 1998, like VNK privatization, or covered topics of which Mr. Rybin had no direct knowledge, such as Tomskneft's restructuring. [Salavat Karimov was a senior investigator in the Office of Prosecutor General, investigating high-profile cases. His investigative team was responsible for putting together the "YUKOS case." Mr. Karimov is credited in Russian mass-media with "inventing a system to convict any oligarch.'" He was involved in investigating politically-motivated cases against Vladimir Gusinskiy and Boris Berezovskiy. -Eds.] Either topic was irrelevant to the indictment.

The audio tape playback of the first interrogation revealed frequent leading questions and affirmative statements by Mr. Karimov. Mr. Rybin was supplied with company and people's names which he either did not know or did not remember, and was often heard confirming Mr. Karimov's assertions posed in a form a question.

When questioned by the defense:

Mr. Rybin was not aware of the charges against defendants. Mr. Rybin answered Mr. Miroshnichenko's question with "taking assets out of Tomskneft and not paying taxes."

But Mr. Rybin did have knowledge of Tomskneft's crude oil production and oil industry in general and his testimony confirmed what the defendants continue to argue all along - it's impossible to steal crude oil. Despite his reticence and evasiveness, Mr. Rybin explained the highly regulated crude oil production industry and the process of crude oil production from extraction at the well head to transfer into government owned and operated Transneft pipeline system. He told the court that the Ministry of Energy knew at all times where the oil was going and that it was in charge of creating a quota system which determined how much of the oil was for export and how much was for the Russian market.

When asked if he knew that the defendants were accused of embezzling Tomskneft's entire crude production from the end of 1998 until 2003, Mr. Rybin responded "It's impossible to steal oil - all or most of it. Its movement is highly regulated," affirming what defendants continue to argue all along - that the prosecution's allegation is bizarre on its face.

The defense exposed Mr. Rybin's bias by having him go into details of East Petroleum's joint venture with Tomskneft. Extensive questioning revealed that Tomskneft provided everything from license to workforce to equipment. Mr. Rybin could not explain in any meaningful detail how East Petroleum was going to make equal financial contribution to a join venture.

[The defense continued its cross-examination of Mr. Rybin on October 19 and October 20, when Mr. Rybin returned after a two week absence. -Eds.]

Despite coming back with a more confrontational attitude, Mr. Rybin only further exposed his bias towards defendants and contradictions in his testimony further illustrated that his testimony was not based on knowledge of any facts. Despite being given an opportunity after an opportunity to amend and to clarify his testimony, Mr. Rybin ended up spewing a number of absurdities.

The defense's questioning revealed that Mr. Rybin did not see any inconsistency between his assertion that VNK grew in value to at least US$3 billion with YUKOS as a majority shareholder and that the company had everything stolen from it. He continued to insist that no one could physically steal crude oil. His exact words were "Khodorkovsky did not carry crude oil barrels." Instead, Mr. Rybin told the court that "stealing" was to obtain property rights by buying oil using purchase contracts.

Despite being confronted with prosecution's own documents implicating Mr. Rybin's East Petroleum in developing a plan to expropriate Tomkneft shares from VNK, Mr. Rybin, as did other witnesses, questioned authenticity of prosecution's materials. Mr. Rybin did not believe calculations based on the prosecution's documents that showed the price per ton of crude oil increasing from 1997 to 1998. Neither did he believe that East Petroleum had an outstanding indebtedness before Tomskneft. He even attributed it to being another "PWC fiction." [We remind our readers that PWC never recalled its Tomskneft, Yuganskneftegaz or Samaraneftegaz audits. -Eds.]

Mr. Rybin displayed his animosity through frequent shouting, hand waving and fist-thumping on the witness podium. Toward the end of the fourth day of his testimony, he accused everyone who was involved in the 2002 VNK privatization auction of committing a crime. As usual, Mr. Rybin did not have any evidence of facts and circumstances to support his outrageous assertions.

The defense sought one more time to clarify Mr. Rybin's knowledge of the facts related to the charges. Mr. Rybin previously said that he had no knowledge of the embezzlement of crude oil. He was asked if he knew of embezzlement of gas condensate, since the indictment mentioned hydro-carbon by-product. Mr. Rybin did not know anything about that either.