Publication: Monitor Volume: 7 Issue: 37

Media-Most, the embattled media holding founded and headed by Vladimir Gusinsky, may soon come under renewed financial pressure, and not only from its main creditor, Gazprom, Russia’s 38-percent state-owned natural gas monopoly. According to a newspaper report today, Yukos oil company head Mikhail Khordokovsky recently asked Gazprom-Media, the gas giant’s media arm, for assistance in recouping a US$200-million no-interest loan Yukos had extended to Media-Most. The paper also reported that Moscow Mayor Yury Luzhkov had earlier asked Gazprom for help in getting back a US$232 million credit which structures connected to the Moscow city government had extended to Gusinsky’s empire. According to the paper, Media-Most is indebted to other members of Russia’s business elite, who may also demand their money back in the near future (Nezavisimaya Gazeta, February 22).

While Luzhkov and Gusinsky were once closely connected–Gusinsky’s now-insolvent Most-Bank once held the Moscow city administration’s accounts–Luzhkov has put distance between his administration and the embattled media tycoon. Indeed, late last year, after Gusinsky was arrested by the Spanish authorities on a Russian warrant, a Moscow city tax inspectorate filed suit with the city’s arbitration court to get Media-Most and a number of its subsidiaries, including its flagship television channel NTV, declared bankrupt. Luzhkov said he saw nothing political in the Moscow tax inspectorate’s suit and that both the Prosecutor General’s Office and the Moscow tax authorities had reason to be looking into the media group’s “problems” (see the Monitor, December 18, 2000). Despite Luzhkov’s apparent support of the authorities’ moves against Gusinsky, Moscow’s city government finance minister Yury Korostelyov was summoned to the Prosecutor General’s Office this past January and charged with abuse of power and negligence. The charges against Korostelyov were connected to the fact that the city government had converted US$200 million in municipal funds into Media-Most promissory notes (Moscow Times, January 15).

If the Moscow city government and other Media-Most call in their debts all at once, it will make it even more unlikely that Gusinsky will be able to hold onto Media-Most. Gazprom already holds 46 percent of NTV, and another 19 percent of the channel’s shares are the subject of a legal battle. Media-Most put up that 19-percent stake as collateral for a US$262 million loan from Credit Suisse First Boston which was guaranteed by Gazprom and comes due this summer. Gazprom claims that Media-Most has violated the terms of a repayment agreement the two sides reached late last year, and thus already forfeited the 19-percent NTV stake. Gazprom representatives recently met with representatives of a consortium of investors led by CNN founder Ted Turner to discuss the possible purchase of NTV. The consortium’s representatives, including Grigory Berezkin, the head of the Evroseverneft, a Russian oil company, reportedly offered US$175 million for a 65-percent stake in NTV (Nezavisimaya Gazeta; see the Monitor, February 19).

In a newspaper interview published earlier this week, Gusinsky, who remains under house arrest in Spain awaiting possible extradition to Russia on fraud charges, seemed to signal that he expects be bought out–or forced out–of Media-Most, or at least out of NTV. He told France’s Liberation that the Russian authorities were close to achieving their goal of “destroying” NTV. He also said that while he trusted the “professionalism” of Ted Turner, who has asked the Kremlin for a guaranteed that NTV will remain independent, Turner could end up getting tricked. The Russian authorities, Gusinsky warned, often say one thing while thinking another and doing a third, and therefore are entirely capable of “welcoming” Turner’s consortium while simultaneously “finishing off” NTV. Gusinsky, a strong critic of Kremlin policies, attacked them once again, charging that Russia was on its way to becoming a totalitarian state and that the treatment of Chechens at the hands of the Russian military was “practically genocide” (Liberation, February 19).