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Creditors Claim Control Over Russia's NTV

Media: Pro-Kremlin investors vote to oust board at the independent network. Journalists promise a fight.

April 04, 2001|MAURA REYNOLDS | TIMES STAFF WRITER

MOSCOW — The standoff between the Kremlin and Russia's only independent national television network reached a crisis point Tuesday when creditors tried to seize control of the network by replacing its top executives with Kremlin loyalists--one of them an American banker.

The action, which took place at a shareholders meeting of questionable legality, was perhaps the decisive strike against NTV, whose pugnacious programming has deeply irritated the Kremlin.

Journalists and liberal politicians see the battle over NTV as a fight over freedom of speech. But Russian prosecutors and the network's lead creditor, the state-run natural gas monopoly Gazprom, insist that they are only trying to force the network to pay its debts.

Pro-Kremlin investors, who claimed to represent 50.44% of NTV shares, voted to oust the board of directors and install two new top executives: the disgraced former privatization minister, Alfred Kokh, as chairman, and controversial U.S. financier Boris Jordan as general director.

The maneuvers, denounced by network employees as illegal, left NTV's ownership and editorial independence hanging in the balance.

At a news conference, Jordan pledged to preserve NTV's independence and to protect it from political pressure. He insisted that the company is broke and that the takeover was necessary to put it back on a steady financial footing.

"I want you to understand that there are two NTVs," the 34-year-old investment banker said. "One is responsible for its television programs and lives according to that genre. The other NTV is a joint-stock company which lives in accordance with the tough laws of business. . . . My diagnosis is that the financial management of NTV doesn't match the quality of its programs."

It was unclear what steps the two sides would take next. Jordan said he planned to take over direction of the network immediately. NTV journalists vowed to resist.

During evening programming, the network's logo was stamped with a red slogan reading "Protest." Several journalists who were named to the new board said they would refuse to serve.

NTV is the least popular of Russia's three national networks, in part because many people find its scandal-mongering distasteful. NTV has been particularly critical of Russia's two wars in the separatist republic of Chechnya.

"I am convinced that the preservation of such an independent, open, serious channel as NTV is our common task and our common responsibility," said former Soviet President Mikhail S. Gorbachev, who has previously defended President Vladimir V. Putin's commitment to free speech.

"For me, what is happening today is simply nonsense. It is a challenge to our entire society," Gorbachev said.

Few observers expressed doubt that Gazprom acted at the Kremlin's behest. Last summer, Putin approved an "information doctrine" designed to strengthen state-controlled media.

"The thing we keep forgetting is that the president is a product of the system called the KGB," said Valery Yakov, an analyst with the Noviye Izvestia newspaper. "It is not Gazprom who is fighting today against [NTV]. It is not Jordan, who is just a foreign mercenary hired to conduct a purge of the media. It is the system that for dozens of years fought dissent, and now that it has come to power, it is fighting against [NTV]."

Jordan, whose grandparents fled Russia during the Bolshevik Revolution, grew up in New York but moved to Russia in the early 1990s to help the government with its first privatization auctions. He worked with other oligarchs against NTV founder Vladimir Gusinsky in the 1997 privatization of the Svyazinvest telecommunications firm. He currently heads a Moscow investment firm.

During his news conference, Jordan said his American background will help him direct the network.

"Having been born in America and having spent a big part of life there, I grew accustomed to quality television from my childhood," he said, speaking in Russian with an American accent.

"As NTV general director, I consider it my duty to protect the independent journalists of my company from pressure from the authorities or the shareholders."

He insisted that he has no immediate plans to fire NTV journalists.

"But there should be no illusions," Jordan said. "I have a responsibility before the shareholders to make this company work and make a profit. And if need be, I will invite in new people."

NTV, founded by Gusinsky in 1993, has been in the thick of warfare among Russia's political and economic clans. In 1996, Gusinsky and NTV agreed to support President Boris Yeltsin's reelection campaign and were rewarded with hundreds of millions of dollars in loans, guaranteed by Gazprom.

But Gusinsky and NTV fell out of favor over coverage of Chechnya and a number of campaigns orchestrated by the network. One campaign, begun after Gusinsky lost out in the Svyazinvest auction, targeted Kokh and accused the privatization minister of accepting an improper book advance. Kokh was forced from office in 1997.

Last June, Kokh became head of Gazprom's media subsidiary, which immediately began calling in NTV's loans. In November, Gusinsky defaulted on a loan to Gazprom and was forced to relinquish his shares in NTV, giving Gazprom a 46% stake. Tuesday's meeting included at least two minority shareholders who cooperated with Gazprom to bring the total representation to 50.44%.

Two courts ruled in recent days that the Gazprom-sponsored shareholders meeting was illegal, but both decisions were overturned on technicalities.

The meeting took place the same day that Putin delivered his annual state of the nation address at the Kremlin. Many NTV supporters noted that nowhere in his hourlong address did he mention protecting the media.

"The [government's] real policy . . . was demonstrated today by the events with NTV," said Grigory A. Yavlinsky, leader of the liberal Yabloko party. "The message is very simple: The authorities don't want to have non-state-owned, independent mass media."

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