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By Sabrina Tavernise

Putin Critic Puts His Media Empire Under Thumb of the Kremlin

The New York Times, November 14, 2000

MOSCOW, Nov. 13 The Russian media mogul Vladimir V. Gusinsky, a fierce critic of his government and deeply in debt, tentatively agreed today to give up control of his publishing and broadcasting empire to the country's natural gas monopoly, which is controlled by the Russian government.

The agreement, which is subject to court review, raises questions about the level of independence Mr. Gusinsky's company will retain after the gas company becomes its largest single shareholder with a 46 percent stake. Mr. Gusinsky's company, Media-Most, owns the nation's leading independent television station NTV and his news programs and publications have been critical of Kremlin policies.

Mr. Gusinsky, who left Russia last July after being imprisoned briefly on fraud charges, is in Europe. Although the charges against him were dropped last summer, Russian prosecutors want to question him again and today opened a criminal case against him on fraud charges and issued a warrant for his arrest. He will not return to Russia for questioning, his lawyers said.

President Vladimir V. Putin has made no secret of his antipathy toward Mr. Gusinsky, perhaps the single biggest target in a government campaign of legal and political pressure against prominent Russian businessmen who influenced politics in the 1990's. Mr. Gusinsky, the main political opponent of Mr. Putin, was the only one of those men who had to give up property.

The latest charges against Mr. Gusinsky were widely seen as the government's way of keeping him out of politics, and out of the country.

Mr. Gusinsky's weak financial condition was his main downfall. He borrowed heavily to pay for several expensive projects including a new satellite. One of his creditors was the country's gas monopoly, Gazprom, whose affairs are heavily influenced by the government, its biggest shareholder. He continues to owe money to Gazprom, which has used the debt as its chief lever to weaken Mr. Gusinsky's grip on his company.

Today's agreement, which was concluded over the weekend, gives Gazprom a 46 percent stake in the company, the largest single amount, and reduces Mr. Gusinsky's holding to 35 percent from a controlling stake, said Alfred Kokh, the Gazprom executive leading the talks.

Another 19 percent will be held by Gazprom as collateral for a loan that comes due next year. Under the agreement, that stake will be put up for sale to a foreign investor. Gazprom hired Deutsche Bank to help find a buyer. The gas company said it had not decided what to do with its stake.

The agreement caps months of negotiations between Gazprom and Media-Most over money owed to Gazprom. Though the government has said it was not involved in the dispute between the two companies, Russia's press minister, Mikhail Lesin, brokered a deal between them in the summer that would have given Gazprom a majority stake in the media company.

Although a Media-Most spokesman said the television station staff and editorial policies would remain unchanged, analysts were not convinced.

"This is a very shaky situation for NTV," said Liliya Shevtsova, senior associate at the Carnegie Endowment for International Peace. "It is the crown jewel and we have no guarantee that the current management will hold on to their jobs."

See also:

NTV Case

Vladimir Gusinsky's case

The New York Times, November 14, 2000

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