Publication: Monitor Volume: 6 Issue: 181

Russia’s Prosecutor General’s Office yesterday launched a criminal case into alleged embezzlement by the heads of the companies belonging to the Media-Most holding. The case was brought in connection with a complaint by Gazprom, the natural gas monopoly and a Media-Most creditor, that the media holding transferred assets offshore in order to hide them from creditors. The natural gas giant and it media arm, Gazprom-Media, have alleged that among the assets transferred abroad were shares which Media-Most had put up as collateral for loans guaranteed by Gazprom. Media-Most’s lawyers have denied this. So far, the Prosecutor General’s Office has not indicated exactly whom it is targeting in its new probe. Gusinsky, meanwhile, failed to appear today for questioning at the Prosecutor General’s Office in Moscow in response to a summons which Valery Nikolaev, an investigator with that office, issued on September 27. Gusinsky was apparently summoned as a witness in the new embezzlement case–although this (like many aspects scandal) is not entirely clear. Genri Reznik, the Media-Most chief’s lawyer, said that he would advise his client, who is abroad, not to appear for questioning. Yesterday Media-Most spokesman Dmitry Ostalsky said that Gusinsky, who was jailed briefly in June in connection with another criminal investigation, would not return to Russia to answer the prosecutors’ questions (Russian agencies, September 28-29; see the Monitor, September 28).

That the Prosecutor General’s Office has now launched an investigation into Media-Most’s transfer of assets raises further doubts about the sincerity of President Vladimir Putin’s statement that the authorities should stand on the sidelines in disputes between “economic subjects” like Gazprom and Media-Most. Putin, through his spokesman, expressed surprise and “outrage” over the fact that Press Minister Mikhail Lesin added his signature in July to a document co-signed by Gusinsky and Gazprom-Media chief Alfred Kokh which agreed to drop criminal charges against Gusinsky in return for his consent to sell Media-Most to Gazprom for US$300 million plus forgiveness of more than US$400 million in debt to the natural gas giant. Lesin, however, got off with nothing more than a public reprimand from Prime Minister Mikhail Kasyanov (see the Monitor, September 28). If confronted with this latest inconsistency, Putin is likely to do what he did during the scandal surrounding the arrest of Radio Liberty correspondent Andrei Babitsky earlier this year, when the head of state, citing the separation of powers, argued that he had no right to interfere with a case launched by Prosecutor General’s office.