The case against former Yukos chief Mikhail Khodorkovsky has seen him toppled from the heights of corporate power and driven the nation's leading oil group to the brink of bankruptcy.

Khodorkovsky is standing trial with a top associate, Platon Lebedev, whose arrest last July heralded the start of the so-called Yukos affair - widely seen in Russia as a political witchhunt.

The first day of their trial, which is expected to last several months, was still going on eight hours after it began at the Meshchansky court in central Moscow amid tight security.

Khodorkovsky's lawyers asked the judge to release their client for the duration of the proceedings. Earlier, the judge declined a similar request by Lebedev's attorneys.

Potential sentence

"In my understanding, a person can be kept in custody if there is a risk he will commit a crime comparable to what he is accused with," Khodorkovsky told reporters during a break in Wednesday's session. "Nothing like that was proved where I am concerned."

Khodorkovsky and Lebedev are charged with seven counts of fraud, tax evasion and embezzlement and are accused of defrauding the state of more than $1 billion.

"In my understanding, a person can be kept in custody if there is a risk he will commit a crime comparable to what he is accused with. Nothing like that was proved where I am concerned"

Mikhail Khodorkovsky,
former Yukos chief

Both have denied any wrongdoing but face up to 10 years in prison if found guilty.

For the first time since the arrests last year, reporters were allowed into the courtroom, although attorneys said conditions for a truly open hearing had not been provided.

Khodorkovsky and Lebedev sat in a courtroom cage, as is the custom in Russia's Soviet-era judicial system, and joked between themselves during a break in the proceedings.

Yukos shares fall

Meanwhile, investors frantically shed shares in Yukos, which Khodorkovsky and Lebedev, along with several other associates, acquired during Russia's controversial privatisations in the 1990s.

Yukos faces two upcoming court hearings of its own that could force the oil giant to declare bankruptcy.

On Friday, a court is due to decide whether to uphold the tax ministry's claim of $3.5 billion dollars in unpaid taxes for 2000, as well as extra fines and interest.

On 23 June, a court will rule when the claim, if upheld, can be enforced.

With Yukos warning that it cannot pay the tax bill because of a freeze imposed on its assets after Khodorkovsky's arrest, investors and analysts did not wait for any court decisions.

Fabulous wealth

After closing on Tuesday at their lowest levels in 30 months, Yukos shares ended Wednesday's trading down 3.88% on Russia's benchmark RTS Index.

Putin has vigorously pursued
Russia's oligarchs

The probe into Yukos and its key shareholders was launched last summer and is widely seen as Kremlin payback for Khodorkovsky's political ambitions. However, President Vladimir Putin has angrily lashed out at such speculation.

Khodorkovsky, 40, was detained on 23 October when masked security service agents stormed his private jet during a stopover in Siberia and flew him to Moscow.

The confident tycoon who last year was among Russia's most powerful people has been in jail ever since.

Khodorkovsky's supporters say he was targeted because he had spent part of his fortune financing opposition parties before last December's parliamentary election and because he had dared to openly defy Putin.

Khodorkovsky's wealth was estimated this year by Forbes magazine at $15.2 billion.