Russia Journal - 04.26.2001

 

Russia Journal

Duma Passes Foreign Media Ownership Bill

MOSCOW - The State Duma lower house of parliament approved in a first reading a bill limiting foreign ownership in a Russian mass media outlet to 50 percent.

One of the authors of the draft, Unity's Alexander Chuyev, said the law limits to 50 percent the maximum size of capital that foreigners can invest in shares issued by a Russian media outlet, according to a report by ITAR-TASS.

He said the draft law applied to foreign legal entities and individuals, persons without citizenship and those with dual citizenship, as well as to Russian legal entities in which 50 percent or more of the staff are foreigners. The bill must go through two more readings in the Duma before being sent to the upper chamber, the Federation Council, and to the president for his signature.

Ajay Goyal, president of Norasco Publishing -- which publishes The Russia Journal and is fully foreign owned -- expressed his concern at the passage of law but cautioned against hysteria. “We are in favor of some reasonable limits on foreign participation in mass media in line with U.S. and European laws," he said. "But we need clarifications on how it will apply to existing companies with foreign capital. Legislation such as this has been expected for many months and, unlike some large multinational media groups, we can adapt to the new situation without much problem.”

The largest foreign-owned media group in Russia is Independent Media, which is owned primarily by Dutch shareholders. The CEO of Independent Media, Derk Sauer, denied in a news report published in his own newspaper, the Moscow Times, that the company was for sale. He had earlier stated that his company would not sell shares to Russian shareholders. There have been persistent rumors that Sauer was planning to sell his shares to Boris Jordan or Gazprom-Media. One of the reasons cited by sources was the looming passage of this legislation. Sauer, however, denied in the same report that a sale to Jordan was being planned.

Other well-known foreign media groups with holdings in Russia are Conde Nast, Hachette Filippachi and Edipress -- which recently launched Viva magazine with a “multimillion dollar investment.”

The Media Ministry confirmed that it was drawing up a list of all foreign-owned media which is “expected to be ready by [Friday.]”