Bloomberg News

Khodorkovsky Has 50-50 Chance of Parole, Deutsche Bank Says

March 26, 2012

The Kremlin’s human rights council this month urged outgoing President Dmitry Medvedev to pardon Yukos Oil Russian Co. billionaire Mikhail Khodorkovsky, seen here, before Putin’s inauguration in May. Photographer: Alexey Sazonov/AFP/Getty Images

The Kremlin’s human rights council this month urged outgoing President Dmitry Medvedev to pardon Yukos Oil Russian Co. billionaire Mikhail Khodorkovsky, seen here, before Putin’s inauguration in May. Photographer: Alexey Sazonov/AFP/Getty Images

Mikhail Khodorkovsky, the Yukos Oil Co. billionaire jailed during Prime Minister Vladimir Putin’s presidency, has a “50-50” chance of winning early release, Deutsche Bank AG (DBK) and Troika Dialog said.

The odds of Khodorkovsky being freed are “significantly higher than any time in the past,” Deutsche Bank said in a note to clients today, citing Yaroslav Lissovolik, head of research and strategy for Russia.

The Kremlin’s human-rights council this month urged outgoing President Dmitry Medvedev to pardon Khodorkovsky before Putin’s inauguration in May.

Khodorkovsky was arrested on the tarmac of a Siberian airport in 2003 and was later sentenced to 13 years in prison after two convictions for fraud, tax evasion and oil embezzlement. Khodorkovsky maintains his innocence, saying the cases against him were retribution for his opposition to Putin.

Medvedev ordered a review of 30 cases, including the guilty verdicts against Khodorkovsky and his business partner, Platon Lebedev, and gave Prosecutor General Yuri Chaika until April 1 to present his findings, the Kremlin said March 5.

Releasing Khodorkovsky would spur a rally in Russian stocks of 5 percent to 10 percent, Deutsche Bank said in the note. Lissovolik declined to comment further when Bloomberg reached him by phone in Moscow.

“It’s a 50-50 call right now,” said Chris Weafer, chief strategist at Troika Dialog, the investment banking unit of state-run lender OAO Sberbank (SBER).

Micex Index Rises

Chaika’s review “should be completed this weekend and then any cases found to be unsound will go to a presidential commission for final review and recommendation,” Weafer said by phone. “By that time, Putin will be in the Kremlin.”

The Micex Index (INDEXCF) of 30 Russian stocks advanced 1.6 percent to close at 1,565.12 in Moscow, its biggest one-day gain in more than two weeks.

The Russian gauge surged as much as 1.6 percent in August 2008 on a report, later retracted, that Khodorkovsky had been given parole. Medvedev steps aside in May to allow Putin to reclaim the Kremlin spot he occupied from 2000 to 2008.

The new government may want to “make a smash,” by releasing Khodorkovsky, according to Mattias Westman, founder of London-based Prosperity Capital Management, the largest Russia- focused fund manager with about $5 billion in assets.

“It would have a positive effect and would make people reconsider Russia,” Westman said by phone from London. A 5 percent to 10 percent gain for the Micex is not “a bad estimate,” he said.

To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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