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. Last Updated: 07/27/2016

Auditors Refused Access to ORT

Despite being majority-owned by the government, ORT Russian Public Television has refused to open its books to scrutiny by the Audit Chamber, the State Duma's financial watchdog.

Claiming that it is not in fact majority-owned by the state, the broadcaster has also refused requests from the Prosecutor General's Office when it moved to intervene on the Audit Chamber's behalf.

The financial watchdog has been attempting to audit ORT's accounts for about four months, after the State Duma voted to order such an audit.

Under Russian law, any company in which the state owns a stake is obliged to open its books to the Audit Chamber following an official request.

However, ORT general director Igor Shabdurasulov has continually declined to let the Audit Chamber anywhere near his company's books.

"The Audit Chamber has no legal grounds to audit the financial and economic activities of the ORT," Shabdurasulov said last week to Itar-Tass.

He also claimed that on June 7 he sent a letter to Deputy General Prosecutor Sabir Kekhlerov laying out his arguments in support of this view.

While he did not elaborate further to Itar-Tass, associated financial news agency Prime-Tass quoted the letter as saying that ORT had not received any state budget funds since 1995.

Shabdurasulov has also stated in May that the state in fact does not own a majority stake in ORT, or indeed any stake.

"ORT has no state property. Those 51 percent of shares listed as belonging to the state are owned by Itar-Tass [3 percent], TTTs [Television-Technical Center, 3 percent] and the Property Ministry [45 percent]," Shabdurasulov said in a written statement.

"To check the effectiveness of the management with the state stock, the Audit Chamber must apply to the organizations to which the shares belong to," Shabdurasulov said.

Both Itar-Tass and Television-Technical Center are 100 percent state owned.

ORT spokesman Grigory Simanovich expounded further on these views last Friday.

"Our TV company is a joint-stock society that is using property belonging to other organizations," Simanovich said.

"And our own property is extremely small f it is actually chairs, a few tables and some equipment. The rest of the property is rented out from the Television-Technical Center, a state enterprise."

"That is why the question of whether or not the property should be checked or not is absurd f there is basically no property!" Simanovich said.

However, Audit Chamber head Khachim Karmokov denied ORT's defenses on both grounds.

"We know that the Finance Ministry was paying quite significant sums to the Communications Ministry to cover ORT's expenses and [the television station] also was receiving bonds from the state budget."

He also brushed aside Shabdurasulov's claims that the broadcaster is not really state owned.

"I think ORT should not be so stubborn, they must be checked because the controlling stake belongs to the state."

The Audit Chamber was specially created by the State Duma lower chamber of the Russian Parliament to audit state organizations and organizations that spend budget funds.

"If the federal share cannot be separated from the whole property, then all the property must be audited," Sergei Pykhtin, a spokesman for the Audit Chamber, said Tuesday.

The 49 percent that is not split between state organizations, Itar-Tass, TTTs and the property fund is in private hands.

A consortium of banks called ORT KB f including SBS-Agro, Alfa-Bank, Menatep and Obyedinenny Bank f has long held a 38 percent stake in ORT, with the remaining 11 percent in the hands of LogoVaz, a car dealership said to be controlled by notorious tycoon Boris Berezovsky.

However, a 14 percent stake f 7 percent from private hands and 7 percent from the state's stake f has been placed in trust with state owned Vneshekonombank as collateral for a $100 million loan.

That loan was granted by presidential decree in order to let the television company deal with some $95 million in debts coming due that the hard economic times were making it difficult to service.