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. Last Updated: 07/27/2016

First Witness Testifies in Yukos Trial

APA supporter of Mikhail Khodorkovsky holding his portrait outside the court where he and Platon Lebedev are being tried.
The former director of a fertilizer company took the stand Friday as the first witness in the fraud and tax evasion trial of former Yukos CEO Mikhail Khodorkovsky and a top business partner.

Anatoly Pozdnyakov used to head Apatit, the firm at the center of the case against Khodorkovsky and Platon Lebedev. The 1994 privatization of Apatit, a company that makes a key fertilizer component, was one of the deals that helped Khodorkovsky build the empire that made him Russia's richest man.

Prosecutors say Khodorkovsky and Lebedev were part of an "organized group" that won a 20 percent stake in Apatit through a scheme involving shell structures that bid for the shares.

Pozdnyakov, the former general director of Apatit, told the Meshchansky District Court on Friday that the group that bought Apatit was shocked by the company's critical financial health, Itar-Tass reported. But he said the group played a "positive role" in the company's development.

"I don't consider that they deceived us," Ekho Moskvy radio quoted Pozdnyakov as saying.

The Apatit deal was one in a wide array of post-Soviet sell-offs of state property in murky auctions that often brought prices far lower than the enterprises' estimated value.

The criminal case against Khodorkovsky and Lebedev is part of a complex web of legal actions that includes a crushing 99.4 billion ruble ($3.4 billion) back tax bill for 2000 that Yukos says could force it into bankruptcy.

On Thursday, defense lawyers failed to get the court to drop the charges against Khodorkovsky and Lebedev on the basis of arguments that the statute of limitations had already expired.

If convicted, they each face up to 10 years in prison.

 Naftasib, a Moscow-based oil company, has proposed to pay about $8 billion of Yukos' tax bill in exchange for a controlling stake in the company, Kommersant reported Friday, citing London-based sources close to Yukos and Sibneft.