Accessibility links

Breaking News

Russia: Gazprom Takes Control Of Independent NTV

Moscow, 3 April 2001 (RFE/RL) -- Russia's partially state-owned gas giant Gazprom today effectively took control of NTV -- the country's only independent nationwide network -- by voting in a new board of directors and naming a new director-general.

The network's journalists and managers called the move "illegal" and said they would not back down from the fight for control of the station.

Dmitri Ostalsky, press secretary for Media-MOST, the parent company of NTV, said today's election during an extraordinary shareholders' meeting at Gazprom "will not have any legal consequences." He added: "Gazprom ignored all legal grounds in executing the state's will, but we will stand until the end."

Gazprom's action today brought to a dramatic head a nearly year-long court battle over the ownership of the financially troubled Media-MOST. Gazprom is the holding company's largest creditor, and has been battling for full control of NTV and most of the company's other media outlets -- including the Sem Dney publishing house, Ekho Moskvy radio station, and cable channel NTV-Plus.

Gazprom-Media, the gas monopoly's media arm, says that the move is simply a step in seeking reimbursement of hundreds of millions of dollars in unpaid loans to Media-MOST. But Media-MOST managers, including founder Vladimir Gusinsky and Director-General Yevgeni Kiselyov say the payment demands are a pretext for the state to carry out its goal of muzzling media freedom. They accuse the state of using financial and judicial pressure to silence NTV's outspoken criticism of Kremlin policy, most notably in Chechnya.

Gusinsky is now in Spain awaiting a ruling on extradition to Russia on fraud charges.

The new NTV board includes only three former board members. Kiselyov, who also hosts a popular weekly news analysis program, was ousted from his post as director-general. He was replaced by Boris Jordan, a U.S. businessman who has numerous investments in Russia and is said to be one of the main architects of the country's controversial privatization schemes in 1996-97. Gazprom-Media head Alfred Kokh was elected chairman of the board

At a news conference this afternoon, Kokh called the board's overhaul a victory:

"We are satisfied with the shareholders' meeting that took place [today] and believe that at this stage we have a real possibility of saving the company. As we have often said in the past, our rights as shareholders and creditors were being encroached upon. Today, the possibility arose for us to fully realize our rights."

In a press release, Kokh also claimed that NTV's independence would be maintained. He said the appointment of Jordan as director-general guaranteed the station would uphold its free speech rights.

Jordan himself stressed economic motives in the board reshuffle. He explained that, without intervention, NTV would be driven to bankruptcy. He said the station had incurred nearly $70 million in losses since 1996:

"I can only tell you that where I grew up, where I went to school -- the United States -- this company would have been liquidated in a week's time."

Jordan also said he would resign from the post of director-general if he was ever pressured to restrict the station's editorial independence.

The outcome of today's meeting -- and even whether it would be held at all -- had been uncertain due to a flurry of last-minute court decisions handed down over the past few days. Courts in Moscow and Saratov had declared today's meeting illegal. But the same courts reportedly cancelled their decisions last night, giving Gazprom-Media the green light to proceed. NTV spokesmen continue to dispute the court's reversal, saying the Saratov judge did not actually cancel his decision.

Gazprom, which owns 46 percent of NTV, was also uncertain whether a quorum would be attained at today's meeting. Gusinsky's group -- which directly or indirectly controls 49.5 percent of NTV shares -- said it was planning to boycott the meeting. But Capital Research and Development, a U.S.-owned fund holding 4.5 percent of the shares, attended the meeting and joined with Gazprom to form a 50.5 percent majority to push through the new Gazprom administration.

In addition to Jordan, the new board of directors includes several Gazprom officials, one NTV journalist, and two NTV executives.

Journalist Yevgeni Kulistikov, who left NTV last year to head the state-run RIA-Novosti news agency (Kulistikov was RFE/RL Moscow's news director before joining NTV), was called back by Gazprom to become the station's editor-in-chief. But NTV's journalists rejected the choice, citing a change in the station's statutes allowing them to appoint Kiselyov to the position instead. Gazprom-Media has called that move illegal.