Publication: Monitor Volume: 6 Issue: 205

The Russian Prosecutor General’s Office yesterday turned up the heat on the country’s two main media moguls, Vladimir Gusinsky and Boris Berezovsky, announcing that each had been summoned for questioning in separate corruption cases and could face arrest. Deputy Prosecutor General Vasily Kolmogorov told reporters that Gusinsky had been summoned to appear for interrogation on November 13 as a suspect in the fraud case involving debts that Gusinsky’s Media-Most holding owed to Gazprom, Russia’s natural gas monopoly. If Gusinsky failed to appear, Kolmogorov said, a warrant for his arrest might be issued and his name put on the wanted list of Interpol, the international crime-fighting agency (Russian agencies, November 1). Gusinsky, who has been traveling abroad, recently ignored a summons to appear for questioning; his lawyer said that Gusinsky feared arrest if he were to answer the summons (see the Monitor, October 13). In June of this year, Gusinsky was arrested and briefly jailed in Moscow’s notorious Butyrka prison after answering a request to appear for questioning concerning a weapon seized during an earlier police raid on Media-Most’s Moscow headquarters. Aleksei Venediktov, chief editor of Media-Most’s Radio Ekho Moskvy, said yesterday he had spoken by telephone to Gusinsky, who said he was ready to give evidence, but not in Russia, because he believed that his rights would not be guaranteed there. Gusinsky, who was in Great Britain, also called a rumor that he had requested British citizenship “a myth and lunacy” (Radio Ekho Moskvy, November 1). Gusinsky holds dual Russian-Israeli citizenship.

Media-Most’s press service charged yesterday that in issuing the new summons for Gusinsky, the Prosecutor General’s Office was attempting to disrupt the holding’s negotiations with Gazprom to reach a settlement on paying off its debts. Media-Most owes Gazprom a total of US$473 million for loans which the gas giant had guaranteed. Gazprom, which has accused Gusinsky’s holding of sending assets abroad which it had put up as collateral for the loans, is suing Media-Most for US$211 million of that total. Last month, Gazprom chief Rem Vyakhirev said that an unnamed Western investor had expressed interest in Media-Most–something Gusinsky would probably see as the lesser of various evils (see the Monitor, October 4). More recently, there was talk that Media-Most and Gazprom had reached a compromise concerning debt repayments.

Media-Most’s press service also charged yesterday that Gusinsky’s summons was in part “banal revenge” for an October 31 Moscow court ruling on a suit which Prosecutor General Vladimir Ustinov brought against Media-Most’s NTV television channel (Radio Ekho Moskvy, November 1). The court ruled that parts of an NTV program broadcast earlier this year, which charged that Ustinov had received an apartment several years ago with the help of then Kremlin property manager Pavel Borodin, were defamatory, but refused to rule on whether the apartment had been obtained legally (Russian agencies, November 1).

But while Media-Most seemed to be playing down the significance of the Prosecutor General’s Office’s latest moves, Kolmogorov’s accusations against Gusinsky and Media-Most yesterday were much wider and deeper than earlier ones. It had been previously thought that the prosecutors were investigating Media-Most for illegal transactions: transferring shares abroad which had been put up as collateral for Gazprom-guaranteed loans. Kolmogorov said yesterday that accepting those loans itself constituted fraud. As he put it, Media-Most and its affiliates had by 1999 suffered “multi-billion[-ruble] losses” and assumed debts considerably larger than their total assets. Given these losses and debts, Kolmogorov argued, Gusinsky and other Media-Most executives were legally obliged to “liquidate” their companies. Instead, the prosecutor claimed, they continued to accept more loans, worth more than US$300 million, by putting up assets which in fact did not exist as collateral. This, according to Kolmogorov, constituted fraud, as defined in Article 159 of Russia’s Criminal Code (Russian agencies, November 1). Given Kolmogorov’s comments, it is hard to escape the conclusion that the Prosecutor General’s Office is seeking to jail Gusinsky and liquidate Media-Most.