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Russia: Scrutiny Of NTV Contrasts With Reluctant Probe Of Gazprom

Russia's probe of NTV television contrasts sharply with its reluctance to investigate activities at Gazprom, which has sought control over NTV. Reformers have been urging a full examination of Gazprom assets for months, but prosecutors appear instead to have taken the gas monopoly's side.

Boston, 30 January 2001 (RFE/RL) -- As the Russian government takes aggressive steps against the Media-MOST group on behalf of Gazprom, it has been treating questions about the gas monopoly with far more delicacy.

Since prosecutors arrested Media-MOST head Vladimir Gusinsky following fraud allegations last June, raids on his offices have become near-daily occurrences. A police search on 26 January marked the 28th raid since the probes started last May.

The reasons cited for the investigations have been nearly as numerous, starting with charges of illegal wiretapping and theft of $10 million in state funds. Then, after months of focusing on Gazprom's financing of Media-MOST subsidiary NTV, prosecutors abruptly shifted attention last week to alleged loans made by the station to its journalists. The original charges of theft were dropped last July due to lack of evidence.

Throughout the case, there has been little doubt that the state has been acting in support of Gazprom's efforts to take control of the NTV network, which was critical of the war in Chechnya during President Vladimir Putin's election campaign. Gazprom-Media head Alfred Kokh insists the takeover drive is strictly about business, not censorship, arguing that he only wants a return on a $211-million loan that Gazprom guaranteed for Media-MOST.

But skepticism over the government's motives has been worldwide. Concerns about press freedoms have been voiced by the OSCE and the U.S. government.

Last week, the state support for Gazprom's efforts reached new heights when a court froze 19 percent of Media-MOST shares in NTV and bailiffs barred Media-MOST from voting with these shares. The move allowed Kokh to claim a majority voting stake in the network, even before a court ruling next month.

By contrast, the government's treatment of Gazprom has been strikingly different. Last July, prosecutors politely requested documents from the company on its dealings with Media-MOST. They were graciously turned over without a search. Such behavior may be expected, considering that the state owns 38 percent of Gazprom, which pays one-fourth of Russia's tax revenues.

But what is more remarkable is the government's seeming reluctance to pursue questions about Gazprom that could yield a far greater return than the takeover of NTV.

Putin has been pressed for the past year to examine ties between the gas monopoly and its privately-owned trading partner Itera. The company has grown at astonishing rates, thanks to its dealings with Gazprom. Minority shareholders led by former Finance Minister Boris Fyodorov accuse Gazprom of asset-stripping and have sought further information to no avail. While Gazprom's output fell last year, Itera's sales of mostly-Gazprom gas soared over 30 percent to nearly 80 billion cubic meters, while its deliveries to Russian customers rose tenfold.

Last Friday, the State Duma's Audit Chamber released partial results of a review of Gazprom's activities. Reports indicate that the major thrust of the criticism fell upon government members of the Gazprom board, who met to discuss production only four times since the start of 1999. The audit also reportedly blamed Gazprom's low investment in production on its spending of 23 billion rubles, or over $800 million, in other areas last year. In particular, the study noted the 5 billion ruble cost of underwriting the Media-MOST debt.

The audit raised questions about Gazprom's loss of profits due to a shadowy supply deal between Itera and the Yamalo-Nenetsk Autonomous District. But it seems to have stopped short of confirming Fyodorov's charges of asset-stripping.

Last week, the Gazprom board also voted under pressure from Fyodorov to commission its own audit of links to Itera. But it appointed its regular auditing firm, PriceWaterhouseCoopers, prompting an outcry from critics. Dmitry Vasiliev, head of the Institute of Corporate Law and Corporate Governance, said the choice could pose a potential conflict of interest.

There were suggestions last week that the government is taking a greater interest in the Itera question after Economic Development and Trade Minister German Gref submitted a series of questions to be answered by Gazprom.

But it is also clear that the government has moved much more slowly to investigate accusations of asset-stripping at Gazprom than to probe charges that Media-MOST has hidden its assets from the gas monopoly. Gref showed no interest in the ties between Itera and Gazprom when RFE/RL asked him about the issue during a visit to the United States three months ago.

The relative speed of the two inquiries may be a strong argument that the NTV takeover really is about censorship, and not about business, despite the assurances of Putin and Kokh.