Publication: Monitor Volume: 6 Issue: 184

Rem Vyakhirev, head of Gazprom, Russia’s 38-percent state-owned natural gas monopoly, said yesterday that a “European media holding” had expressed interest in buying Media-Most, the holding which is both headed by Vladimir Gusinsky and in debt to Gazprom for more than US$400 million.

Vyakhirev, who was in New Delhi, India, accompanying President Vladimir Putin on his official visit there, told reporters: “We demand that the debt be returned. There are no politics in this. If they cannot pay with money, we will receive Media-Most’s shares and sell them to whomever pays the most.” Gazprom owns a 14-percent stake in Media-Most and holds another 40-percent stake that Media-Most put up as collateral for two loans guaranteed by Gazprom (Kommersant, Moscow Times, October 4; Russian agencies, October 3). While Media-Most is genuinely vulnerable because of its debts, most observers believe that Gazprom’s hard line is being dictated by the Kremlin, which for more than a year has been taking actions against Media-Most in retaliation for the media holding’s critical coverage of the Chechen war and attention to allegations of high-level Kremlin corruption. In June of this year, Gusinsky was jailed briefly on charges of embezzlement connected to a criminal investigation going back several years. In July, he signed an agreement with Alfred Kokh, head of Gazprom’s media arm, and Mikhail Lesin, Russia’s press minister, to sell Media-Most to Gazprom for US$300 million, forgiveness of the media holding’s debts and a government pledge to drop its criminal investigation. Gusinsky subsequently disavowed the agreement, saying he had signed it “at gunpoint.” Gazprom is suing Media-Most for breaking the agreement and for allegedly placing shares in the companies it controls, including NTV, with offshore companies. The suit will go to court on October 9. The Prosecutor General’s Office, meanwhile, has begun a criminal investigation into Gazprom’s complaint.

Media-Most’s position was made more difficult yesterday, when Sberbank, the state savings bank, announced it was invalidating its loans to Media-Most, worth US$100 million. The bank said that Media-Most’s problems with Gazprom’s had raised questions about the media holding’s credit worthiness. Media-Most spokesman Dmitri Ostalsky called Sberbank’s statement “another step in the psychological war against the holding.” The website, however, said that Sberbank’s apparent decision to call in its debt marked the death knell of Gusinsky’s ownership of Media-Most, because he would not be able to pay it off (Russian agencies, October 4).

Meanwhile, there has been much speculation over the last twenty-four hours about which “European media holding” has expressed interest in buying Media-Most shares. said it was most likely the Germany media conglomerate Bertelsmann, which publishes the newspaper Berliner Zeitung and the magazines Stern and Focus, among others. The website also mentioned two American media companies as possible purchasers of Media-Most shares–Time Warner and Rupert Murdoch’s News Corporation. Indeed, the newspaper Kommersant today quoted unnamed sources in Gazprom as saying that News Corporation had expressed interest in Media-Most shares “both verbally and in writing” (Kommersant, October 4). It is interesting to note here that Murdoch has in the past enjoyed friendly relations with Boris Berezovsky, the tycoon and erstwhile Gusinsky rival who is putatively under Kremlin pressure to give up his control of Russian Public Television (ORT). In 1999, when Berezovsky was under political pressure from then Prime Minister Yevgeny Primakov, the tycoon, in an apparent attempt to thwart a Primakov-inspired bid to pry away ORT, reportedly negotiated with Murdoch about buying a stake in the 51-percent state-owned channel (see the Monitor for February 8, 1999). It should be noted that Kommersant, which carried today’s report that News Corporation was negotiating with Gazprom to buy Media-Most shares, is itself part of Berezovsky’s media empire.

In any case, it is unclear whether the government will permit Gazprom to sell a stake in Media-Most to a foreign company, and, if so, what size a stake in the media holding Gazprom will be allowed to sell. According to some interpretations, President Putin’s new “information security doctrine” will strictly limit foreign ownership of Russian media. Press Minister Lesin was quoted as saying it would be “incorrect” for a foreign firm to control 51 percent of Media-Most’s NTV, but okay if it bought a 5-10 percent stake (Russian agencies, October 4).