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. Last Updated: 07/27/2016

ORT's Ownership Hidden From Duma




Russia's parliament has failed in its attempts to find out who owns the country's biggest television company, ORT.


The question arose in the State Duma last week, when the lower chamber considered a bill that would strengthen the government's control of ORT. If the bill becomes law, it will require the Duma's approval of mortgage, sale or any other transfer of shares from the state's 51 percent stake and bar any sale of ORT shares to foreign entities or individuals.


The bill's key sponsor, Gennady Volkov, who is deputy chairman of the Duma's committee on information policy and communications, said that his committee had been trying to get ORT's incorporation documents for two years, but to no avail. Last month, he received a letter from ORT's general director, Igor Shabdurasulov, saying that ORT had no "foundation contract" as such. Volkov said he had received conflicting information as to who controls how much of ORT.


"I don't know how many [ORT] shares the state really has ... I don't like that," Volkov said.


The bill's drafting was prompted last month by fears that Boris Berezovsky, who is seen as the chief figure in ORT, was negotiating the sale of a 20 percent government stake in ORT to Australian-born media magnate Rupert Murdoch. Murdoch has been reported to have pulled out of these negotiations.


The Duma adopted the bill in its first reading Friday with a 308-0 vote. The second and third readings are likely to take place simultaneously next week, after which the bill requires approval of the parliament's upper chamber and President Boris Yeltsin's signature, Volkov said Tuesday.


If the bill is signed into law, it could create obstacles for ORT's current bailout plan, which involves mortgaging around 14 percent of the company's shares, half of them from the government portfolio and half from the private one, to Vneshekonombank in exchange for a $100 million loan. Under the new bill, the transfer of government-owned shares to Vneshekonombank would require a special law, Volkov said.


ORT spokesman Grigory Simanovich said Tuesday that the station already received two tranches of about $20 million each and expects the third one to arrive soon. But he said the company's shares have not changed hands yet. "As far as I know, the paper processing is still in progress," he said.


Vneshekonombank spokesman Tatyana Golodets refused to comment on the ORT loan program because Yeltsin's decree ordering it was marked "for official use only." "All the conditions of this loan agreement are confidential," she said.


ORT was formed in 1995 in a deal between Yeltsin, Berezovsky and a group of other leading private businessmen. It was privatized by a Yeltsin decree. It is the country's biggest television station, broadcasting to almost the entire former Soviet Union, and reaches 98 percent of Russian households.


"Today, although the 51 percent controlling portfolio of ORT is managed by the state, the state's real control of the company has been reduced to null," sponsors of the bill wrote in their annotation.


Shabdurasulov reacted angrily to the bill last week. In comments reported by Interfax, he said the bill contradicts the Constitution and the law on joint-stock companies.


"There is politics and there is law," Shabdurasulov said. "If they are combined, it should be done at least in a correct manner."