The unexpected decision by Russian leader Vladimir Putin to free imprisoned oligarch Mikhail Khodorkovsky may be generating headlines world wide for its humanitarian implications, but the business ideals that Khodorkovsky championed remained mired in Russian politics. Before he was arrested an imprisoned a decade ago, Khodorkovsky was attempting to bring Western business standards — especially generally accepted accounting principles — to Yukos, the Russian oil company he controlled.
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Putin, of course, didn’t stop with Khodorkovsky’s imprisonment. He went after Yukos itself, seizing the company and arranging its sale to OAO Rosneft in a deal that would make Rosneft Russia’s largest oil company. (Khodorkovsky was prosecuted on embezzlement charges related to oil that Yukos exported between 1998 and 2003, when he was running the company.)
After the fall of the Soviet Union, Western oil companies flocked to Russia, hoping to develop its vast oil and natural gas reserves. Most have since pulled out or significantly reduced their operations, and there’s little indication that will change with Khodorkovsky’s release. Companies that invest in Russia still have little confidence of finding any legal recourse if the government or a government-controlled company decides to come after them.
Few business people know that better than Bruce Misamore, a former Pennzoil executive that Khodorkovsky hired in 2000 as chief financial officer to lead the company through its adoption of U.S. accounting standards. Since fleeing Russia himself in 2003, Misamore has joined with a small band of other former Yukos executives in trying to recover assets for the company’s 50,000 or more shareholders, many of them Russian citizens.
“There’s no reason that we shouldn’t continue to pursue valid legal recourse against Rosneft,” Misamore told me. “The company isn’t Mikhail.” Khodorkovsky, in fact, was forced to give up his shares in the company when he went to prison.
Misamore, who faces criminal charges in Russia himself, said he hasn’t spoken with his friend and former boss yet, but he hopes to soon. He admits he was surprised by the sudden turn of events. The last time Khodorkovsky’s prison term was set to expire, in 2010, the government ordered up new charges that extended his sentence. Misamore and others expected more of the same this time.
“I’m shocked,” he said. “I didn’t anticipate this. The prosecutors have been coming down on me and others in the last few weeks on another possible trial.”
Misamore might have suffered a fate similar to Khodorkovsky’s if he hadn’t been on a business trip to London when Russian government agents stormed Yukos’ Moscow offices in 2003. He returned to his home in Houston, where he used his company laptop, as a corporate asset, to attempt to put Yukos into Chapter 11 bankruptcy and forestall the government seizure. The tactic didn’t work, and laptop was later stolen in a mysterious home burglary that Misamore suspects was orchestrated by the former KGB.
Now, Misamore says he’s happy that Khodorkovsky is free: “He’s out, and that’s all that matters.” The fight for Yukos, however, continues.