The arrest of one of Russia’s oldest billionaires is sending shivers down the backs of business owners already reeling from U.S. and European sanctions over President Vladimir Putin’s policies in Ukraine.

A decade after Mikhail Khodorkovsky’s imprisonment led to Russia’s largest nationalization since the Soviet era, the prosecution of Vladimir Evtushenkov, 65, may prod businesses to pull even more money out of an economy on the verge of recession and relocate abroad, Alexander Shokhin, who lobbies on behalf of the country’s largest companies as head of the Russian Union of Industrialists & Entrepreneurs, said yesterday.

Evtushenkov was charged with money-laundering and placed under house arrest two days ago, triggering a sell-off in shares of his companies, including AFK Sistema, and slicing his net worth by a third, to $4.5 billion, according to the Bloomberg Billionaires Index. Evtushenkov denies the charges.

“This event could set a serious precedent and lead to more pressure on businesses in other spheres,” Alexei Makarkin, an analyst at the Moscow-based Center for Political Technologies, said by phone. “Appetite comes with eating.”

The case against Evtushenkov stems from a probe into the alleged theft of shares in oil assets in the central region of Bashkortostan that Sistema acquired in 2009, according to investigators.

Confiscation, Jail

If the businessman is convicted, the authorities could use the ruling to confiscate Bashneft, Evgeny Reznik, a lawyer at the Moscow-based firm Gridnev & Partners, said by phone. The charges of money-laundering carry a maximum prison term of seven years, according to the Russian penal code.

Evtushenkov’s real crime is most likely refusing to sell his oil company, OAO Bashneft, to state-run OAO Rosneft under terms dictated by its chief executive officer, long-time Putin ally Igor Sechin, Khodorkovsky said on his website yesterday. Khodorkovsky, who was released in December, lost the bulk of his Yukos Oil Co. to Sechin and Rosneft after a series of forced auctions.

Rosneft isn’t interested in Bashneft and Khodorkovsky’s comments aren’t true, Mikhail Leontyev, a Rosneft spokesman, said by phone.

Putin’s spokesman, Dmitry Peskov, said the Kremlin is “categorically against any comparisons” with the Yukos affair. “Any attempt to politicize the situation is not justified and not acceptable,” Peskov said by phone.

Rosneft’s Needs

Moscow-based Rosneft, the world’s biggest traded oil company by output, needs Bashneft to prop up flagging production at older fields, according to Khodorkovsky. The Vedomosti newspaper reported in June that Evtushenkov rebuffed an offer by Sechin for Bashneft, citing unidentified people familiar with the matter.

Evtushenkov appealed to Prime Minister Dmitry Medvedev to help him get better terms for Bashneft, according to two people familiar with the matter who asked not to be identified because the talks were private. Medvedev’s spokeswoman, Natalya Timakova, declined to comment.

Bashneft fell 21 percent to 1,469.10 rubles in Moscow yesterday, cutting the company’s market value to 221 billion rubles ($5.8 billion).

Evtushenkov’s best option may be to sell and leave the country for self-imposed exile, like media tycoon Vladimir Gusinsky did in 2000 after selling his assets to another giant state energy company, OAO Gazprom, while being threatened with prison, Khodorkovsky said.

‘Gusinsky Scenario’

“If they can take Evtushenkov’s asset on the terms these people want, then we will end up with a Gusinsky scenario,” Khodorkovsky said. “If not, then I’m afraid the situation could be a lot worse.”

Evtushenkov in July said that the criminal proceedings in which he was being questioned as a witness could be a hostile “raid” in disguise to seize control of Bashneft.

Russia is the world’s most corrupt major economy, according to Transparency International, which ranks it alongside Pakistan and Nicaragua at 127th out of 176 nations in its latest survey, down from 82nd in 2000.

Whatever the outcome of the Evtushenkov case, the way it’s being handled will further hurt an economy already being isolated over the pro-Russian insurgency in eastern Ukraine and Putin’s annexation of Crimea in March, according to Christopher Granville, managing director of research group Trusted Sources.

Capital Flight

“This will prompt yet more capital flight and further weaken Russia’s economic capital, which will certainly be warmly welcomed by the U.S. and other western governments,” Granville said by phone from London.

Capital outflow in Russia, which reached almost $75 billion in the first half, more than in all of 2013, is running at the fastest rate since the 2008 global financial crisis, according to central bank data.

Former Finance Minister Alexei Kudrin said Sept. 16 that economic growth will be close to zero, maybe even negative during the next two to three years, primarily because of a lack of investment.

Anatoly Chubais, the mastermind of Russia’s first privatization program in the 1990s who now heads state-run technology company OAO Rusnano, said Evtushenkov’s arrest will deepen the economic malaise at a time when Russia’s already “on the brink of recession and stagnation.”

Rosneft’s domestic oil output has declined to the lowest level since its acquisition of TNK-BP from BP Plc and a group of billionaires in March 2013, according to the Energy Ministry.

Borrowing, Technology

The slump may deepen. The U.S. and the EU have restricted Rosneft from borrowing and banned exports of equipment and technology for deepwater, Arctic offshore and shale oil deposits, accusing Putin of supporting the Ukraine insurgency.

“The economy is doing poorly, sanctions have been imposed, and all there’s left to do is to seize the tidbits that are left,” Vadim Bit-Avragim, who helps oversee about $4.1 billion at Kapital Asset Management LLC in Moscow, said by phone. “Output is falling, new technologies have been banned, and here there’s a well-managed company.”

Mattias Westman, CEO of Prosperity Capital Management, the biggest minority shareholder in Bashneft, said Evtushenkov’s arrest came as a surprise because the investigation appeared to be targeting the previous owners.

Arrest Warrant

A case was initially opened in relation to Ural Rakhimov, son of the former Bashkortostan president, Murtaza Rakhimov, and businessman Levon Ayrapetyan, according to Moscow’s Basmanny District Court. An international warrant has been issued for Rakhimov, Interfax reported Sept. 16, citing an unidentified person familiar with the case.

“This is yet another blow to the lingering hopes of investors about the business climate in Russia,” Stephen Dashevsky, a co-founder of investment advisers Dashevsky & Partners, said by phone from London.

“If politics was the motivation with Khodorkovsky, the persecution of Evtushenkov, who has always been loyal to the government, is linked to the economic interests of the boss of one of the state companies,” Dashevsky said.