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. Last Updated: 07/27/2016

Gazprom Calls Off Talks On TV Sale

Russia's natural gas monopoly has called off talks on selling to foreign investors some of the shares it holds in Russia's largest private television channel, a Gazprom official said Thursday.

The breakdown of negotiations is the latest upheaval in the protracted business and political battle between the government and Russia's largest independent media holding, Media-Most.

Media-Most agreed in November to turn over a 19 percent stake in its flagship television NTV to government-controlled Gazprom as collateral for a loan.

Under the agreement, the stake was to be sold through Germany's Deutsche Bank to a foreign investor. But Thursday, Gazprom announced that Media-Most has failed to hand over the shares, and said that sale negotiations with Deutsche Bank were off.

"Today, all possible deadlines have expired," Gazprom said in a statement Thursday. "We have exchanged letters with Deutsche Bank on the cancelation of the agreement."

Media-Most spokesman Dmitry Ostalsky said his company refused to turn over the shares because Gazprom had made a separate deal with Deutsche Bank that abolished an earlier provision allowing Media-Most to vote with the shares until they are sold.

"This is a very serious violation of our rights, and that's why the shares were not transferred," he said.

Gazprom, which had previously held other stock in NTV, also received another 16 percent of shares under the November deal in payment of overdue debts. The deal made the monopoly the single-largest shareholder in NTV, raising concerns about state influence over the channel, which is known for its critical reporting on the Kremlin.

Media-Most has been the focus of politically charged scrutiny for months.

Media-Most head Vladimir Gusinsky was arrested in Spain under a Moscow-issued warrant that accuses him of misrepresenting Media-Most's assets before accepting Gazprom's guarantees on loans in 1996.

Gusinsky is under house arrest in Spain, and Spanish authorities are considering whether to extradite him, amid critics' protests that the Kremlin is trying to punish Gusinsky for the critical reporting by his media.

Gusinsky is one of Russia's so-called oligarchs, businessmen who used their political connections to amass fortunes in dubious privatization deals during ex-President Boris Yeltsin's tenure.

Since President Vladimir Putin came to power, Gusinsky's relations with the Kremlin have soured, and his media has harshly criticized the new president over the war in Chechnya, alleged human rights abuses and other issues.

Media-Most has long accused the Kremlin of trying to take control over NTV, Russia's only major television network that is not controlled by the government.

Media-Most's Ostalsky said he hoped that a compromise could be worked out with Gazprom to protect Media-Most's rights and its editorial freedom through the sale of NTV shares.

The Russian government has also been accused by another media magnate, Boris Berezovsky, of trying to take complete control over Russia's main television network, ORT.

The government controls 51 percent of ORT, and Berezovsky controls the rest. The tycoon said the Kremlin was trying to take over his share, and had set up a trust to protect his stake, but later abandoned the effort.