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Russia: Izvestiya Editor Loses Power Struggle With LUKoil

Moscow, 30 June 1997 (RFE/RL) - One of the most visible media battles in Moscow has come to an end, as it became clear that the editor-in-chief of the influential Russian daily "Izvestiya" lost his fight to retain control of the influential publication's commercial operation.

During a special shareholders' meeting last week, Izvestiya editor-in-chief Igor Golembiovsky failed to win reappointment as president of daily. The shareholders' meeting took place immediately after Moscow's Arbitration Court lifted an order preventing such sessions. The order had been issued following Golembiovsky's challenge of the legality of an April 22 shareholders meeting organized by Izvestiya's majority shareholder - Russia's oil giant "Lukoil" - without the editor's agreement.

Golembiovsky said LUKoil was pressuring Izvestia, in order to change the paper's editorial policy, and said it was a question of Russian journalists trying to keep their independence, in relation to financially powerful Government-connected business investors. Golembiovsky recently dropped his legal challenge. And, Moscow observers tell our correspondent that Golembiovsky's decision was made, following the intervention of Izvestiya's new shareholder, Uneximbank, which had appeared on the scene, after the standoff with LUKoil. Uneximbank had been portrayed as the editor's ally.

The English-language Moscow Times said that, although last week's shareholders' meeting was characterized as a compromise among all parties, Izvestiya journalists had admitted in private that the relationship with the new shareholder was more complicated than originally thought.

Uneximbank, chaired by former deputy prime minister Vladimir Potanin, is one of Russia's leading financial groups.

The shareholders' meeting introduced amendments to the company's charter, and elected a new board of directors, including representatives of all interests. An Izvestiya editorial said the composition of the new board was agreed in advance by all major shareholders. It included Golembiovsky and columnist Otto Lazis of Izvestiya, two representatives of Uneximbank and three of LUKoil.

Dmitry Murzin, the editor of Izvestiya's business supplement, Financial Izvestiya, was elected the company's new President. And Uneximbank deputy chairman Mikhail Kozhokin was elected Chairman of the Board.

As a result of an amendment made to the company charter, the same person cannot be simultaneously chairman of the board, president of the company and editor-in-chief of the paper. Golembiovsky previously held all three positions.

It remains unclear whether Golembiovsky will retain his position of editor-in-chief. The new charter requires the editor-in-chief to be nominated by the paper's journalists, but appointed by the board of directors. LUKoil representatives said the journalists' collective is expected to name several candidates for the position.

In an interview with another influential Moscow publication, Kommersant daily, Uneximbank deputy chairman and Izvestiya's new board chairman Kozhokin said a decision on Golembiovsky's fate is expected in the next two-to-three weeks.

Some observers tell our correspondent Golembiovsky might retain his place as editor-in-chief.

Kozhokin has expressed satisfaction with the new management structure. He said, "Izvestiya's main problem had always been the concentration of all functions in the chief editor's hands." According to Kozhokin, that "had led to a management crisis." He added that "now a decision has been reached and the paper will be managed not only by the editor-in-chief, but also by the president. Executive power will remain in his hands, while the legislative power will be in the hands of the board of directors."

Izvestiya has portrayed the dispute essentially as a freedom-of-speech issue. For weeks, starting in April, the newspaper run front page articles accusing the government, and particularly Prime Minister Viktor Chernomyrdin, who has strong links with LUKoil, of tightening its grip on the media. Izvestiya editors repeatedly accused LUKoil of trying to act as a censor on the government1s behalf.

The state is the largest shareholder in LUKoil.

The dispute erupted when Izvestiya reprinted an article from the French daily "Le Monde," alleging that Chernomyrdin had amassed a personal fortune of $5 billion during four years in power. Le Monde later printed a correction to its story. Meanwhile, Chernomyrdin denied the allegations and LUKoil's President, Vagit Alekperov, said Izvestiya had damaged LUKoil's reputation. Alekperov said the company would move to assert its control of the newspaper.

The dispute between Izvestiya and LUKoil became public, as concern grew that a small circle of press barons and powerful financial groups were using their stakes in Russian newspapers and television channels to exert political influence.

Few Russian publications are profitable and Izvestiya is not an exception. Like most publications, Izvestiya depends on outside funding for its survival and development. Izvestiya maintains a high profile among the traditional Russian intellectual public - which preserves a pro-democratic orientation - but, is disillusioned by the social consequences of economic reforms.

During the dispute with LUKoil, Izvestiya published an appeal signed by 37 Russian writers and performing-arts figures. They said Izvestiya's situation was a "cynical demonstration of the almightiness of the powerful bureaucracy, which manipulates big capital." However, following the latest developments that resulted in the editor's loss of control, no such appeals have appeared in the paper. And, this is widely viewed as a sign that Uneximbank has already managed to influence the paper's leadership.