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Jailed tycoon Khodorkovsky in court on new charges

MOSCOW (Reuters) - Jailed tycoon Mikhail Khodorkovsky goes on trial on Tuesday to face new charges of embezzlement and money laundering in a case his lawyers say will test President Dmitry Medvedev’s promises to reform Russia.

Jailed former Russian oil tycoon Mikhail Khodorkovsky stands in the defendant's cage during a court hearing in Chita August 21, 2008. REUTERS/Tatyana Makeyeva

The fate of Khodorkovsky, who fell foul of the Kremlin under former President Vladimir Putin and was jailed in Siberia for tax evasion and fraud, is being closely watched by investors hoping for a milder tone under Medvedev.

Khodorkovsky says he is the victim of corrupt officials who feared his political ambitions and wanted to carve up his YUKOS business empire, which produced more oil than OPEC member Qatar.

The 45-year-old former tycoon, once ranked as Russia’s richest man, was brought to Moscow this month from a prison in a remote town near the Chinese border to face new charges at a preliminary court hearing in the capital.

“This case of immense importance because of what it will say to all of us about where Russia is going,” Robert Amsterdam, a defense lawyer for Khodorkovsky, said by telephone from London.

“This process will be of immense import for those who follow Russia,” he said.

Medvedev, a former lawyer sworn in as Kremlin chief last May, has demanded a clean-up of the Russian court system and has criticized high-level corruption.

“The fact that the Russian president has denounced legal nihilism puts this process in a different context to the last process, where the Russian president was saying things quite different to that,” Amsterdam said.

Prosecutors say Khodorkovsky helped embezzle 900 billion roubles (18 billion pounds) and laundered 500 billion roubles, charges that could keep him in jail for another 22 years if he is found guilty.

Khodorkovsky’s lawyers say their client is a political prisoner and the new charges are absurd.

They note that he is charged with stealing more oil from the YUKOS oil company that he controlled than it actually produced during the years in question.

Khodorkovsky became one of Russia’s most powerful businessmen -- known in Moscow as “oligarchs” -- by buying state assets cheaply and trading commodities in the chaos that followed the fall of the Soviet Union.

His arrest in 2003 by officers of the FSB security service at a Siberian airport sent shock waves through Russia’s business community, which feared the Kremlin would try to regain control of key raw materials companies sold off in the 1990s.

Khodorkovsky was convicted in 2005 and is serving a prison term in Chita, about 7,000 km east of Moscow. He persistently denied his guilt and blamed senior officials close to Putin for his fate.

Kremlin critics say his arrest and the carve-up of his business empire marked a turning point in Putin’s presidency by allowing hardliners to get the upper hand and shelve reforms.

Editing by Andrew Dobbie