Regarding the alleged unprofitablility of TV-6
Aminority shareholder gets no dividends and suspects that the company has been manipulating assets without his knowledge. On learning that the company turns no profit, the shareholder asks the court to declare the company bankrupt.
This is a normal scenario, but what is not normal is when the minority shareholder receives a lucrative offer to sell his 15 percent stake for $10 million, but refuses and again asks the court to declare the company bankrupt.
Even more strange is when the minority shareholder offers to buy the majority shareholder's stake and then tries to bankrupt the company. And strangest of all is the minority shareholder's stubborn insistence on bankruptcy proceedings after stating that the majority shareholder's offer is laughable because the company is on the way up and will soon rake in profits and have a higher value. But if the court bankrupts the company, it becomes virtually worthless. So where is the logic?
If this were a dispute between shareholders in a factory or a bank, you could imagine the minority shareholder had some cunning plan. But in this case, there are no clever tricks in the wings, no logic and no business interest. Only politics.
The minority shareholder, a pension fund affiliated with oil giant LUKoil, got the political order from the Kremlin to liquidate TV company TV6, owned by exiled oligarch Boris Berezovsky. TV6 took in those members of the NTV team who quit the channel after its seizure in April, not wishing to work for the new owners.
Now, LUKoil is playing the role that Gazprom played in the NTV saga – that of battering ram and liquidator. But LUKoil has the simpler job, as it doesn't have to liquidate an entire wealthy and well-organized business, it merely has to eliminate a single TV channel. It has to make the blow fatal, but at the same time make it all look legal.
The old "dispute between two companies" pretext used in the NTV conflict doesn't work quite so well in this case, however. TV6 has no debts, its new management has boosted the channel's ratings and LUKoil turned down the offer to sell its stake. But these arguments fell on deaf ears in the court, which, as in the NTV case, has to observe political expediency in its decision.
In the TV6 case, the authorities look to be even less worried about the negative political and PR consequences than they were during the NTV case. President Vladimir Putin's new foreign policy course is much to the liking of his Western partners, and the Kremlin has some grounds for thinking that its support for the anti-Taliban operation gives it a free hand to do what it thinks necessary at home.
But the TV6 case might also have a nonpolitical consequence. LUKoil and the courts have resorted to a previously unused provision in the Civil Code to get TV6 closed. In Russia today, it would be possible to close almost every company in the country on the grounds that it showed no profit and zero revenue, even though it is working.
The thing is, Russian business has worked by the unwritten practice of hiding its money from excessive taxes by not showing profits, and the state has turned a blind eye to the practice, realizing that to do otherwise would give entrepreneurs no chance of survival. But now a precedent has been set that could give the state a powerful weapon against inconvenient businesses. And not only the state – this provision, which is theoretically useful but dangerous in the current Russian context, could also become a weapon in the hands of predatory businesses and could spark a whole new asset carve-up.
Another consequence is that the TV6 case and the whole Media-Most affair shows that Russia still does not have an independent judicial system. When Alfred Kokh was head of Gazprom-Media, the company that took over NTV, he notoriously said, "I can get any decision I need." And that is precisely what he did. The state made sure the courts ruled in Kokh's favor, even when it went against the facts and common sense.
One simple example: The tax inspectors took NTV to court on the grounds of the same Article 99 of the Civil Code used against TV6 and said, of course, that the case was purely economic. But the court refused to liquidate NTV, saying that a company that paid all its taxes couldn't be considered insolvent. But in the TV6 case, this argument hasn't worked, nor has the argument that the company has become profitable in the last few months. Now, TV6 has to be liquidated within a year.
TV6's management can appeal, but it's already obvious that with the Kremlin sticking to its guns, there's no chance of victory.
"The authorities have gone for the hard-line approach," said TV6 General Director Yevgeny Kiselyov at a press conference. "The decision to liquidate TV6 was taken in the Kremlin. We will appeal, but it's not the court that will decide the issue, it's the political leadership of the country. Our chances of survival are slim, but they are there."
"We feel a certain regret at this court decision," said Media Minister Mikhail Lesin. "We had thought that the upheavals on the media market were over, but it turns out not all the lessons are over. We hope that the shareholders will reach an agreement and settle this dispute peacefully. We will act only in accordance with the law. A frequency can be put up for tender either when a company's license expires, or for some other reason. So, it's hard to predict the future now. I'd like to see the court decision and, in accordance with it, look at the options."
Lesin's comments show a certain bewilderment, as if these latest events took the man responsible for the previous operation against Media-Most by surprise. Perhaps this suggests that Lesin is also on his way out and is being kept out of important decisions, or perhaps it's just that the state media-strangling machine is now on automatic pilot.
As for Lesin's words of regret and desire to see the court decision, this is just rhetoric. Attentive observers of the political scene now know full well that any channel can be taken off the air at any moment, and that the law allows it to happen. But for it to go ahead, Lesin has to get the order from the Kremlin. On condition of anonymity, one high-placed government official said a few days ago that this order would certainly come.
Commenting on the situation with the TV channel, the official said: "They will definitely close it. Maybe they won't even wait until the appeal is examined. The law allows this, it seems. They'll close it, but not before Dec. 1, because they want to see the how ‘Za Steklom' ends and find out who wins the apartment."
(The writer is a political correspondent for Yezhenedelny Zhurnal.)
http://www.therussiajournal.com/index.htm?obj=5321
Btw, Lukoil was using the statistics from the
previous fiscal year, when Tv6 was indeed losing money. However, after it took on NTV's top brass, it's ratings went up dramatically, landing it in fourth position among Russia's TV stations. "Za Steklom" (Russian "Big Brother") was a HUGE hit, comparable to the original Survivor in the US. Everyone knew this, but Lukoil decided to ignore this.
Another thing. The court ruled in Tv6's favor, but 3 days later it reversed its ruling.
A bit too weird, don't you think.
Have a very nice day.
-fgalkin