Khodorkovsky & Lebedev Communications Center

Bio:

From 1998 through 2001, Mr. Golubovich was Director of Strategic Planning and Corporate Finance at YUKOS. After leaving YUKOS, Mr. Golubovich became President of OAO Russian Investors. He was also a shareholder of Group MENATEP Limited.

Testimony dates:

January 19, January 21, January 22, January 25, January 26, January 28 and January 29, 2010 

Testimony Summary:

On January 19 Mr. Golubovich was questioned in detail about the VNK subsidiaries' shares exchanges, prompted by Birkenholz law suit. He testified that the VNK/Birkenholz agreement signed by former VNK management was believed to be fraudulent. It overvalued Achinsk Refinery shares by at least a factor of 4. In order to protect Tomskneft's shares, which Birkenholz sought to attach to satisfy judgment in the case it filed, YUKOS exchanged those and Achinsk shares. After explaining that Birkenholz got court bailiffs to initiate arrest of Tomskneft's shares without depositing a security deposit, Mr. Golubovich told the court that Mr. Khodorkovsky's decision to protect VNK assets was well-founded. According to Mr. Golubovich, the exchange was done in the interest of the company. According to Mr. Golubovich, these share swaps were of temporary nature.

Commenting that investigators began dragging everyone in for questioning, Mr. Golubovich unequivocally stated that the first investigation into VNK share exchange had all the markings of someone ordering it against the company.

After the trial resumed on January 21 Mr. Golubovich sought to walk back some of his testimony from the previous Tuesday. He was questioned, once again, about the VNK subsidiaries' shares exchange. Despite admitting lack of knowledge about the MCO valuation report on YUKOS and VNK subsidiaries' shares, Mr. Golubovich speculated that the exchange was of unequal value. [Please see below for summary of September 8, 2004, interrogation where Mr. Golubovich testified to the exact opposite. -Eds.] Additionally, Mr. Golubovich distanced himself from his previous testimony that the purpose of the exchange was to protect VNK's assets from being attached to satisfy Birkenholz legal claim. While allowing that the management's position was that the exchange was necessary, Mr. Golubovich left for the court to consider an implication of shares not being swapped immediately after the threat had passed.

Mr. Golubovich was questioned on topics irrelevant to the charges, including privatization of YUKOS and VNK.

Prosecution spent two and a half days reading Mr. Golubovich's interrogation transcripts. As it happened during the previous two days, Mr. Golubovich's earlier testimony differed from later testimony and, in many instances, was inconsistent.

On July 7, 2004, Mr. Golubovich described what he knew about transactions involving VNK subsidiary shares. The court heard about the need to protect VNK assets from being arrested in order to satisfy a court claim filed by a foreign company. Mr. Golubovich briefly described the events surrounding the agreement to purchase approximately 5% of Achinsk Refinery, entered into by VNK's former management and Birkenholz, which the company's new management refused to honor because the shares were greatly overvalued. Mr. Golubovich referred to East Petroleum and Mr. Rybin as the characters involved in the "Achinsk Shares scheme."

On September 8, 2004, while being interrogated by Mr. Karimov, Mr. Golubovich continued to describe the necessity to exchange Tomskneft and VNK shares by an attack launched by East Petroleum and Mr. Rybin. Mr. Golubovich provided more details into the circumstances surrounding the events. Mr. Karimov sought to trap Mr. Golubovich into admitting that MCO's valuation report on the exchanges was specifically ordered with the goal of artificially lowering subsidiary share prices, but Mr. Golubovich told Mr. Karimov that based on the information available to him at the time and regardless of the valuation methodology used, the proposed exchange was "fair." In addition, Mr. Golubovich testified that MCO was chosen for being one of the most authoritative appraising firms in Russia, with its Director serving as President of Association of Professional Appraisers and having a positive reputation among auditors.

September 4, 2007, transcript was irrelevant to the charges. It contained Mr. Golubovich's explanations of why he fled Russia and finally decided to return. The transcript contained testimony used by prosecution to argue for continued arrest of Messrs. Khodorkovsky and Lebedev. Mr. Golubovich decided to return to "clear his name." Upon his return he immediately went to see investigators in charge of his criminal case and, after giving expansive testimony about all circumstances known to him, convinced them to lift his arrest.

December 12, 2006, transcript contained one of the first interrogations after Mr. Golubovich returned to Russia to face criminal charges. The interrogation touched on numerous topics irrelevant to the charges, including history of Group MENATEP Limited, "areas of responsibility" among shareholders of Group MENATEP, and Mr. Golubovich's reasons for joining YUKOS. Mr. Golubovich's transcript contained contradictions and inconsistencies. Discussing YUKOS U.S. GAAP consolidated statements, Mr. Golubovich used phrase "hang the companies here, re-hang them there" about YUKOS consolidated balance. At the same time, Mr. Golubovich told investigator Ganiyev that when it came to PricewaterhouseCoopers, "everything had to be shown with maximum honesty."

Mr. Golubovich advised investigators as to how best to look into repurchase of YUKOS shares from the aforementioned western banks. Mr. Golubovich was cavalier in describing purchases as being made with funds "which no one knows where they came from," telling investigators to question former employees of YUKOS treasury. At the same time, discussing 2000 and on, Mr. Golubovich told investigators that YUKOS was very profitable. Mr. Golubovich suggested to Mr. Karimov that if he was conducting the investigation he would build a chain of transfer pricing and consolidation of companies and use the government to lodge complaints. At the same time, Mr. Golubovich told Mr. Karimov that there were no crimes committed through use of transfer pricing.

Playback of the interrogation audio-tape reveled omissions and inconsistencies. The transcript had Mr. Golubovich telling Mr. Ganiyev that YUKOS paid dividends to "majority shareholders," while on the audiotape one could hear "minority shareholders." Also, the transcript had Mr. Golubovich saying "Khodorkovsky said that companies not owned by YUKOS should receive profit from sales," while the audio tape had the exact opposite - "Khodorkovsky said that companies not owned by YUKOS should not receive profit from sales."

December 13, 2006, interrogation continued what started the day before. Mr. Golubovich testified that he knew very little about YUKOS crude oil sales. Discussing different law firms handling Group MENATEP and YUKOS matters, Mr. Golubovich explained that Mr. Khodorkovsky always wanted to make sure that activities of YUKOS and any of its subsidiaries did not cross with activities of Group MENATEP and any other company it owned. Mr. Golubovich described this policy as "building a Chinese wall" and called it a normal business practice.

Mr. Ganiyev asked why assets owned by YUKOS production companies were transferred into numerous subsidiaries. Mr. Golubovich explained that taxes were too high and Mr. Khodorkovsky was entirely correct in wanting to leave only what was necessary for crude oil production on those companies' balance sheets. Mr. Golubovich swore that share prices were not affected by these asset transfers.

December 15, 2006, transcript was about OAO Russian Investors. Mr. Golubovich discussed events that took place prior to 1998, mentioning that he purchased Russian Investors in 2001 from companies affiliated with Mr. Anilionis. Mr. Golubovich explained that Russian Investors was originally founded to provide brokerage services to Bank MENATEP, but had other clients as well. Mr. Golubovich explained that the company was quite independent from YUKOS and Bank MENATEP. There were three types of services Russian Investors provided to Group MENATEP's companies, including YUKOS - nominal registered holder of shares, consolidation of YUKOS subsidiaries shares, and brokerage services for YUKOS treasury department. The transcript ended with Mr. Golubovich describing a steady growth in value of securities transactions in which YUKOS participated - from about $50 million USD in 1999 to over $1 billion in 2001.

December 25, 2006, transcript contained Mr. Golubovich's explanation about why his signature appeared on a contract for purchase of YUKOS-RM shares by YUKOS-Moscow. Mr. Golubovich explained that for consolidation purposes YUKOS was required to own YUKOS-RM and YUKOS-EP, otherwise auditors and minority shareholders could raise questions why salaries were being paid to outside management companies.

April 9, 2008, transcript contained Mr. Golubovich's explanation about his participation in purchase of Bank MENATEP collection rights and YUKOS shares held as collateral from Daiwa Europe Ltd., West Merchant Bank Ltd., and Standard Bank London Ltd. Mr. Golubovich was asked to speculate about the purpose of the transaction, which resulted in 30% of YUKOS shares reverting to successors of Bank MENATEP, which originally pledged these shares as collateral for loans from the aforementioned banks, after receiving them from its shareholders.

Last transcript was dated May 5, 2008. Mr. Golubovich explained that Russian Investors acted as seller's agent for Wilk Enterprises in transactions with YUKOS, where Trust and Investment Bank (DIB) was purchaser's agent. Transactions involved purchase of Yuganskneftegaz, Samaraneftegaz, Tomskneft, Achinskiy Refinery and other subsidiary shares.

Mr. Golubovich affirmed all transcript testimony, with prosecution re-asking questions on topics already covered during previous sessions. Mr. Golubovich reiterated Mr. Lakhtin's assertions about equivalency of VNK share exchange and his speculations about MCO valuation report.

Mr. Golubovich went through an extensive cross-examination. His testimony revealed inconsistencies with his earlier statements to investigators and during the trial. Mr. Golubovich was unable to adequately explain contradicting statements about MCO valuation report, the threat posed by Birkenholz and the alleged unprofitability of Yuganskneftegaz. Being evasive where he could, Mr. Golubovich often relied on passage of time and claimed that he did not remember specific circumstances of what he was questioned about. Despite his reticence, Mr. Golubovich's cross-examination contradicted numerous assertions found in the indictment.

Mr. Golubovich confirmed that YUKOS paid dividends to all shareholders; its production companies, even if they did not pay out dividends, operated at a profit. Further, Mr. Golubovich admitted that he did not know specific details of Kenneth Dart's lawsuits, despite participating in a lengthy discussion with investigator Ganiyev about the subject. Aside from investigator Ganiyev's assertions, Mr. Golubovich was unable to state with certainty where he may have learned information on funds transfers to Wilk Enterprises. Mr. Golubovich could not explain how he was able to make categorical statements to investigators without being shown any documents to base his answer on.

Mr. Golubovich admitted that he never heard Messrs. Khodorkovsky and Lebedev discuss illegal taking of Apatit shares or its products, acquisition of VNK by illegal means, gratuitous taking of Tomskneft, Achinskiy Refinery and other VNK subsidiaries' shares. Neither Mr. Khodorkovsky nor Mr. Lebedev ever made offers to Mr. Golubovich to participate in anything illegal. Mr. Golubovich testified that Messrs. Khodorkovsky and Lebedev never pressured him to sign anything. He admitted that Mr. Khodorkovsky never presented him with a question about how to embezzle crude oil. Asked if Mr. Lebedev was tasked with leading an organized group in charge of allocating laundered funds and to conduct financial transactions with same funds, Mr. Golubovich explained that at none of the Group MENATEP meetings where he was present anyone talked about "organized criminal group," "embezzlement," or any other similar topics. Mr. Golubovich told the court that his department never received any directives from Mr. Lebedev. None of Mr. Golubovich's employees ever told him that they received orders coming from Mr. Lebedev, either.

Mr. Golubovich testified that pretty much everyone was aware that YUKOS production companies shipped crude oil through Transneft. After several attempts at being evasive, Mr. Golubovich agreed that investors and minority shareholder knew that production companies were selling crude oil at transfer prices to other companies within YUKOS perimeter.

Mr. Golubovich confirmed that investigators did not question him about crude oil. Without remembering specific prices, Mr. Golubovich told the court that crude oil prices in Western Europe were several times higher than those in crude-oil production regions within Russia.