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. Last Updated: 07/27/2016

Inteko Sues Forbes Over Cover Story

Inteko, the construction giant owned by billionaire Yelena Baturina, said Wednesday that it was suing the publisher and editor of Forbes' Russian edition over a December cover story about the company.

Inteko is seeking only 106,500 rubles ($4,040) from each defendant, but the lawsuits could further discourage journalists from writing about sensitive topics involving large corporations, warned the author of the country's law on mass media.

The lawsuit against the publisher, Axel Springer Russia, says the story contained erroneous information about company activities and incorrectly said it enjoyed the support of government agencies, Inteko said in a statement. Baturina is Mayor Yury Luzhkov's wife.

Forbes editor Maxim Kashulinsky subsequently damaged Inteko's reputation by saying in an interview that the company had "violated media legislation that banned censorship," the statement said. Kashulinsky lashed out at Inteko after it demanded that Forbes change a headline on the cover of its December issue, which Forbes did.

Regina von Flemming, director of Axel Springer Russia, said by e-mail that the company had received the lawsuits but declined comment further.

Alexander Dobrovinsky, a lawyer representing both the publisher and editor, said the legal action was without merit and warned that Inteko faced public ridicule whether it won or lost. "It will lose either way," he said. "Nothing is worse than making a laughingstock of yourself."

After the publication of the story, Inteko asked Forbes to reveal which documents and sources it had used for the story. Inteko said it had filed suit because Forbes had refused. It also said the story had caused Baturina "sincere regret" because she had met several times with Forbes reporters and provided "exhaustive" answers to their questions.

As for Kashulinsky, it said he had accused the company of censorship even after the publisher had conceded that the headline was "a breach of journalist ethics."

Kashulinsky said at the time that Inteko was unhappy about the entire story and that someone had leaked it to the company. He also threatened to resign if the story was not printed.

The 106,500 ruble compensation sought in each suit was calculated on the basis of 1 ruble for every copy of the magazine, Inteko spokesman Gennady Terebkov said.

He said the lawsuits were filed last week. The lawsuit against the magazine was filed in the Moscow Arbitration Court and the one against the editor in the Chertanovsky District Court. The courts have yet to schedule hearings.

News of the lawsuits came days after Baturina's brother Viktor indicated that Inteko might get support from at least one government body: City Hall.

"If I said that Luzhkov didn't play a part in Inteko's activities, that would be wrong, just as it would be wrong if I said that Inteko became Inteko because of Luzhkov," Baturin said in an interview published in Vedomosti on Monday. "The truth is somewhere in the middle.

"Of course, if some unfriendly actions were planned against you, that person would think a hundred times before messing with Inteko. It would be stupid to deny that."

He also said Luzhkov had the last word in family discussions about Inteko affairs, including its foray into the cement business, but did not give any money to the company.

Baturin is on poor terms with the company and is suing it over his dismissal in 2005.

A similar libel lawsuit, filed by Alfa Bank against Kommersant in 2004, caused journalists to think twice about their reporting on large corporations, said Mikhail Fedotov, the author of the current law on mass media.

"Everyone is trying to write around [the issues] and be more careful," he said. "That trial killed the appetite to write about anything scandalous at all."

The court ruled that Kommersant had to pay 40.5 million rubles in damages to the bank for reporting that it had financial problems and had long lines of people wishing to withdraw money from its ATMs during the mini-banking crisis of the summer of 2004. Alfa Bank said problems only began after the publication.

The case against Forbes will involve lengthy linguistic studies of the cover story, Fedotov said.

He said Kashulinsky should not go on trial because his comments were an opinion rather than a statement of fact. "There's a fine line, and it has often caused swords to cross," he said.

Inteko has been successful in its Moscow litigation. In 2005, the Tverskoi District Court ruled against Kommersant over two stories. The stories suggested that then-Deputy Mayor Valery Shantsev had held on to his job thanks to Baturina's influence and that she had concealed her part in the construction of the Transvaal water park. The roof of the park collapsed in February 2004, killing 28.

Forbes itself has been the subject of a high-profile Russian lawsuit. Boris Berezovsky successfully sued the British edition over an article by Paul Klebnikov that ran in 1996 and called him a mafia boss who had his rivals murdered. The magazine retracted the claims.

Klebnikov went on to become editor of Forbes Russian edition. He was shot dead outside Forbes offices in Moscow in July 2004. A retrial for two suspects in the killing is to start Thursday.