Russian media giant charged with fraud over assets

Russian prosecutors have opened a criminal embezzlement case against the heads of companies belonging to Russia's biggest independent media group.

Russian prosecutors have opened a criminal embezzlement case against the heads of companies belonging to Russia's biggest independent media group.

At issue is the future of Media-Most, a conglomerate headed by Vladimir Gusinsky that includes a radio station, newspapers and NTV, the only non-government television network. The prosecutors are accusing the heads of Media-Most of fraud on the basis that they are transferring abroad assets that are collateral for a loan of $473m (£312m) made to the company by Gazprom, the State gas company. Media-Most says the charges are "absurd".

Mr Gusinsky and Media-Most, while admitting the loan, claim they are the victims of crude blackmail by the Kremlin to bring NTV under itscontrol.

Vasiliy Kolmogorov, the deputy prosecutor general, said yesterday the fraud charges were made because Media-Most shares used as security for the loan had been moved into offshore funds. He said Mr Gusinsky was being summoned to answer questions.

The battle for the control of Media-Most has continued all summer. In June, Mr Gusinsky was thrown in jail for three days. He later agreed a deal pledging to sell Media-Most to an affiliate of Gazprom, its biggest creditor, which he now says is invalid because he only signed under duress and threat of imprisonment.

President Vladimir Putin has distanced his office from the struggle over Media-Most, saying it is a purely commercial dispute. He has denied having prior knowledge of a raid by masked and armed tax police on Media-Most offices earlier this year.

The Kremlin is evidently angry that Mr Gusinsky is presenting himself as the champion of free speech in Russia, since the financial support he received from Gazprom dates from 1996, when NTV threw its support behind Boris Yeltsin in the presidential election.

The Kremlin's attempt to distance itself from the dispute was undermined this month by the disclosure that Mikail Lesin, the Press Minister, had initiated the deal under which criminal charges against Mr Gusinsky would be dropped if he sold shares in his company to Gazprom.

Mikhail Kasyanov, the Prime Minister, said yesterday that Mr Lesin had "acted improperly in signing a document on relations between two for-profit companies".

Mr Lesin may lose his jobbecause of his involvement in the ownership dispute.