Tim Osborne: If he dares set foot in Moscow, the men in balaclavas will be waiting

Threatened with prosecution over the Yukos affair, an English lawyer says he'll take on Russia's 'bully boys'

Tim Osborne, a softly spoken British lawyer, is hobbling around his Mayfair office on crutches, the result of an over-enthusiastic game of squash. That, though, is the least of his worries. Because Osborne also heads up GML, an investment vehicle and the biggest shareholder in Yukos - the once-mighty Russian oil company that is now the Kremlin's public enemy number one.

Yukos's former chief, Mikhail Khodorkovsky, is these days a resident of a Siberian prison. Osborne, too, can testify that falling out with the Kremlin is a risky business. In August, the Russian prosecutor general's office announced it was launching a criminal investigation into his activities and those of three other executives involved with Yukos (its former president, Steven Theede, former finance chief, Bruce Misamore, and former legal counsel, David Godfrey). The four are accused of illegally taking control of $10bn (£5.3bn) of the company's assets.

The first Osborne, 55, heard of the accusations was when a reporter rang him. The prosecutor's office has not been in touch, and an arrest warrant has not been issued. But Osborne's advisers have told him not to travel abroad, except to the US, in case an attempt is made to arrest him.

"It's bully-boy tactics," he says. "I don't feel safe. If there is the slightest risk of being arrested in Moscow, I'm not going there." As he quips: "No holidays in the Black Sea for me."

Not that it is a laughing matter: Khodorkovsky is serving an eight-year sentence for tax fraud in a remote penal colony 5,000km east of Moscow. He was arrested at a tiny airport in Siberia by balaclava-clad Russian special forces soldiers, who stormed his private jet in the middle of the night.

But Osborne says he feels more angry than afraid. "It's frustrating because my job requires me to go to courts around Europe and meet clients, and I can't do that. Clients are sympathetic, but if they can't get me to come, they go to someone else."

In addition to his involvement with GML, Osborne is senior partner at the UK law firm Wiggin Osborne Fullerlove and acts for clients across Europe. Yet it is his role as managing director of GML (formerly Group Menatep) that garners him the most attention.

Originally set up by Khodorkovsky, the company has a number of investments in Central and Eastern Europe, mainly in telecoms. Once it had Russian assets as well: its stake in Yukos was its biggest, worth over $25bn. But the authorities froze the GML-Yukos holding following Khodorkovsky's arrest three years ago; it is now worthless. Yukos was declared bankrupt in the summer of this year, after the authorities aggressively pursued it for back taxes totalling almost $28bn.

Osborne's involvement with GML goes back to 2003, when the then Menatep asked him to help set up its UK office. It was only after its managing director, Stephen Curtis, died in a helicopter crash (claimed by conspiracy-mongers to be sabotage, but ruled an accident by an English court) that Osborne took over. He declined the offer when it was first made, but changed his mind when two other UK lawyers came on board.

In 2004, when Osborne joined GML, most thought that the Kremlin's target was not Yukos but Khodorkovsky, who had angered Vladimir Putin with his apparent ambitions to be Russia's next prime minister. Few foresaw that Yukos would be destroyed, or that the fallout would be so extensive.

"I wouldn't have signed up if I'd seen this coming," says Osborne of his own predicament. "It is a disgrace that they can fight a lawyer just doing his job by bringing up totally unfounded charges and thereby attempt to wreck his career. But now it's here, we'll deal with it."

He rejects the argument that Khodorkovsky brought trouble on himself by getting involved with politics. "Do you think they should throw David Cameron in jail because he wants to be the prime minister?" he asks. "If you are going to have a 21st-century, G8 democracy, you should be able to have political ambitions."

In Russia, Khodorkovsky's plight attracts little sympathy. He belonged to the cadre of super-rich businessmen, the oligarchs, who bought state-owned industries in the chaotic privatisations of the 1990s for a fraction of their value. The state was almost bankrupt at the time and the law was often flouted.

Some Russia observers say that Khodorkovsky is not the innocent victim portrayed by groups such as Amnesty International. But Osborne rejects the idea that he deserved his fate: "Nobody has suggested he broke any laws when he put Yukos together. I believe he obeyed the laws at the time. And whatever anyone has done in the past, they are entitled to a fair trial. He went through a show trial."

Osborne has harsh words for institutions and companies such as BP that bought shares in Rosneft, Russia's state-controlled oil company, when it floated in London and Moscow in July. Rosneft's main asset is YNK, which Yukos was forced to sell last year to pay its tax bill. Yukos's biggest business, YNK fetched $9.3bn, which analysts said was less than half its real market value.

Rosneft then went to the markets to pay off the consortium of Western banks that had lent it the money to buy YNK. Some critics claim the flotation amounted to money laundering by the Russian government.

Osborne expects Yukos's remaining assets - some refineries and other small oil production companies - to be seized by the state-controlled gas giant Gazprom. He is angry that other investors in Yukos have not protested publicly, something he puts down to fear of missing out on future lucrative flotations and deals. "Most of those are just institutional investors who know what they lose on one company they gain on the next one. They're sure as hell not going to rock the boat in Russia and get cut out of the next [deal]."

With Khodorkovsky in jail and other Menatep executives in jail, GML could have fallen by the wayside. But despite the overwhelming odds, that hasn't happened so far. The vehicle is now majority owned by Khodorkovsky's one-time right-hand man, the Russian businessman Leonid Nevzlin, who is also being pursued by the authorities and lives in exile in Israel.

And despite his own problems with the authorities, Osborne is leading GML's pursuit of over $50bn in damages from the Russian government under the Energy Charter Treaty, an international agreement aimed at encouraging open energy markets. The case, conducted via international courts, could take five years.

Osborne may not have picked a fight with the Kremlin, but a fight he now has - and this unlikely opponent is determined to come out on top.

BIOGRAPHY

BORN 22 March 1951

EDUCATION Law degree from University College London.

CAREER

1974: articled at Lovell White & King.

1976: qualifies as a solicitor.

1978: joins Wiggin & Co.

1979: partner, Wiggin & Co.

1984: managing partner.

2001: senior partner.

2003 to now: joins demerged firm Wiggin Osborne Fullerlove, becoming senior partner.

2004 to now: managing director, GML.