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. Last Updated: 07/27/2016

Prosecutor Opens Media-MOST Probe

A day after news broke that Vladimir Gusinsky signed a deal swapping Media-MOST for his freedom, the Prosecutor General’s Office said Tuesday it was launching an inquiry into claims by gas giant Gazprom that the media holding had hidden assets in off-shore companies.

"If we prove that Media-MOST’s assets were transferred [abroad], a criminal case will be launched," Deputy Prosecutor General Vasily Kolmogorov was quoted by Interfax as saying.

Kolmogorov said Gusinsky may be called in for questioning.

The announcement Tuesday opens a new chapter in a months-long battle for control of Media-MOST. On Monday, both companies acknowledged Media-MOST founder Gusinsky signed a deal in July to sell the holding company for $300 million in cash and $473 million in debt to Gazprom-Media.

However, Gusinsky called the contract invalid, saying he had been forced to sign it under duress and threat of imprisonment. The tycoon spent three days in jail in June on fraud charges and was allowed to leave the country in July.

Media-MOST said Gusinsky, Press Minister Mikhail Lesin and Gazprom-Media head Alfred Kokh had signed a deal to sell the holding in exchange for Gusinsky’s freedom.

Click here to read our special report on the Struggle for Media-MOST.Meanwhile, Media-MOST and Gazprom lashed out at each other at rival news conferences Tuesday.

"It is a crying testimony of blunt blackmail on the part of the state," said former Soviet President Mikhail Gorbachev of the deal signed by Gusinsky in July.

Gorbachev, who heads a media watchdog group organized by Media-MOST, said he wanted to sit down with President Vladimir Putin to express his concerns.

State Duma lawmakers were also infuriated Tuesday. Konstantin Vetrov, chairman of the committee on information policy, said he would demand an explanation from the prosecutor’s office. Yabloko, calling the Press Ministry’s activities political extortion, said it would ask the Duma on Wednesday to send a complaint to Putin.

The Kremlin was silent Tuesday about whether Putin would step into the fray.

Kokh, meanwhile, called on Media-MOST to honor its debts. Gazprom, which is the guarantor of Media-MOST’s $473 million debt, paid off $211 million of that debt, which came due in March. Media-MOST still has to pay $40 million in December to Gazprombank and $262 million next year to CS First Boston.

Kokh said the holding would suffer a loss of $30 million in 2000.

"Media-MOST is in default, and we have not heard serious arguments as to how it will repay its debts," Kokh said.

He said Gazprom-Media would like to sell Media-MOST to a foreign investor. The holding could sell for $1 billion to $2 billion, he said.

"I think we would be able to find an investor for this project within four to six months," he said.

Kokh also said Gazprom-Media would sue Media-MOST for hiding its assets, and he named several companies that he believed are now holding Media-MOST subsidiaries.

Yevgeny Kiselyov, the general director of Media-MOST flagship NTV television, outlined Gusinsky’s latest proposal to settle the debt. He said at a news conference that Gusinsky had offered a 10 percent stake in NTV and stakes of just under 50 percent in all the other Media-MOST companies for the debt.

Such a deal would value Media-MOST at about $1 billion, a sum that media analysts said was fair.

Kiselyov also said that he and other key journalists at Media-MOST would leave if Gazprom-Media took control under these circumstances.

"If control over NTV would be established in this manner, I will not work for one minute with these racketeers and looters," he said.

Gene Moldavsky, vice president of Renaissance Capital, said that the conflict has both political and economical components.

The holding could fetch a sales price of up to $2 billion if it were not embroiled in the dispute, but now it cannot even court investors, he said.

"Today, Media-MOST is worth very little because nobody would want to buy it," Moldavsky said.