Khodorkovsky spent 10 years in prison on charges of tax evasion and embezzlement. His arrest in 2003 and the subsequent prosecution have been widely considered to be Putin's retribution for Khodorkovsky's political ambitions.
Putin first spoke about pardon after a news conference on Thursday, saying that Khodorkovsky has applied for the pardon because his mother's health is deteriorating. The Kremlin's website published a decree Friday morning saying that Putin was "guided by the principles of humanity" when he decided to pardon Khodorkovsky.
The development -- along with an amnesty for two jailed members of the Pussy Riot punk band and the 30-member crew of a Greenpeace protest ship -- appears aimed at easing international criticism of Russia's human rights record ahead of February's Winter Olympics in Sochi, Putin's pet project.
Khodorkovsky was Russia's richest man and the CEO of the country's largest oil company when he was arrested on the tarmac of a Siberian airport and charged with tax evasion. Critics have dismissed the charges against him as a Kremlin vendetta for challenging Putin's power. During Putin's first term as president, the oil tycoon angered the Kremlin by funding opposition parties and also was believed to harbor personal political ambitions.
His actions defied an unwritten pact between Putin and a narrow circle of billionaire tycoons, dubbed "oligarchs," under which the government refrained from reviewing privatization deals that made the group enormously rich.
Khodorkovsky's oil company Yukos was effectively crushed under the weight of a $28 billion back-tax bill. Yukos was sold off. Most of it went to state oil company Rosneft, allowing the Kremlin to reassert control of the country's oil business as well as stifle an inconvenient voice.
Khodorkovsky's current net worth is unknown, but likely it's at most a mere shadow of his onetime fortune.
Leonid Chizhov contributed to this report
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