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Russian gas giant drops Gusinsky deal

gusinsky
Vladimir Gusinsky: His lawyer says he has left Russia  

MOSCOW, Russia -- Russian gas giant Gazprom has backed out of a deal to clear the debts of businessman Vladimir Gusinsky's media empire a day after prosecutors ordered the tycoon's arrest.

The arrest warrant on embezzlement charges was issued for Gusinsky, head of the Media-Most group and one of post-Soviet Russia's best known business magnates, after he failed to appear for questioning.

His media group has been harshly critical of the government of Russian President Vladimir Putin.

Gusinsky, who was jailed briefly earlier this year on similar charges, is currently outside Russia, with his exact whereabouts unknown. His lawyer says he is somewhere in Europe.

A Media-Most lawyer, Geralina Lyubarskaya, told reporters that the gas company had acted under pressure from prosecutors.

"This proves that the process is controlled not by Kokh (the head of Gazprom's media arm) but that the office of the prosecutor general simply says whether to strike an out-of-court settlement or not," Interfax news agency quoted her as saying.

She spoke after a court hearing that had been due to validate a deal settling some of Media-Most's substantial debts.

Prosecutors accuse Gusinsky of misrepresenting assets in his Media-Most group of companies when he accepted loans of more than $300 million guaranteed by Gazprom, Russia's natural gas monopoly.

They said Gusinsky's companies were legally bankrupt at the time. Media-Most officials said they acted in accordance with the law.

Arrest 'torpedoed deal'

The court postponed hearings on the case until December 20 after Alfred Kokh, head of Gazprom-Media, revoked his signature under an agreement that both sides said had been clinched last weekend.

Anatoly Blinov, representing Gazprom-Media, said the deal was legally flawed and not enforceable.

"The leadership of Gazprom is once again being deceived," he said in comments broadcast by RTR state television. "As long as I am in charge of legal matters at Gazprom-Media, this agreement will not be approved."

Lyubarskaya retorted that the prosecutors' order to arrest Gusinsky had torpedoed the deal.

Prosecutors had earlier said that proceedings against Gusinsky focused on the media magnate using deception to secure new credits for his group while it was in financial trouble.

Gusinsky is one of the small group of "oligarchs" who made fortunes in the early aftermath of the fall of communism.

He helped bankroll Boris Yeltsin's re-election as president in 1996 but his media group, led by flagship NTV private television, has been harshly critical of Putin's policies since he became president this year.

Media-Most has denied any wrongdoing and said the move was part of a Kremlin drive to clamp down on press freedoms.

Putin has called for action to curb the influence of the "oligarchs" and accuses some journalists of engaging in polemics damaging to the state.

The United States has said it is closely following Gusinsky's case.

Media-Most spokesman Dmitry Ostalsky said on Monday the agreement with Gazprom settled outstanding differences, but did not "involve editorial issues of mass media included in the group or personnel matters."

Gusinsky was allowed to leave Russia last July after being briefly imprisoned on embezzlement charges. The charges were dropped soon after he agreed to sell his business to Gazprom. He later repudiated the deal, saying he had been forced to sign it.

Reuters contributed to this report.



RELATED STORIES:
Russian media mogul charged with fraud
November 13, 2000
Russian prosecutors pressure media magnates
November 1, 2000
Kremlin eyes independent media
August 2, 2000
Gusinsky released from jail, charged with embezzlement
June 16, 2000

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