Wednesday, 11 January 2006

KYRGYZSTAN: MEDIA AND BUSINESS DISPUTES CONTINUING

Published in Field Reports

By Zoya Pylenko (1/11/2006 issue of the CACI Analyst)

Some journalists speculate that Kyrgyz President Kurmanbek Bakiev’s family are somehow linked to the new owners. If this is true, the new authorities seem to follow the way of their predecessors, who once also took Pyramida under control – for profits, and to silence criticism.

According to Kyrgyz journalists, freedom of speech is not hampered any longer as it was under the previous President, Askar Akaev.

Some journalists speculate that Kyrgyz President Kurmanbek Bakiev’s family are somehow linked to the new owners. If this is true, the new authorities seem to follow the way of their predecessors, who once also took Pyramida under control – for profits, and to silence criticism.

According to Kyrgyz journalists, freedom of speech is not hampered any longer as it was under the previous President, Askar Akaev. But still, some state interference with media coverage of events continues. The fact that the new owners of some media companies are difficult to identify is also concerning. A state commission, created to investigate the case of Pyramida’s change in ownership announced on 22 December that it had not managed to identify the owner of Invest Tel, which in turn founded Media Invest, the company which now claims ownership of Pyramida.

On 8 December, staff of the Pyramida station was told that a 50% stake of the company was sold to Media Invest. The journalists were unfamiliar with this company. And the refusal of Pyramida’s staff to hand over the channel to this new, unknown owner’s control was followed by the channel’s violent seizure. However, apparently no court decision was made to give Media Invest the right to take control over the building.

Pyramida was the subject of disputes also in President Akaev’s times, when the telecommunications firm Aeropag (linked to the son of Askar Akaev) received a controlling stake. Managers of the station later said they transferred as collateral a 50% stake of the company to Aeropag in exchange for a three-year, interest-free loan of $100,000 that was needed to buy expensive equipment. On repayment of the loan, the shares would return to Pyramida. The shares could not have been sold in this three-year period. And Pyramida still has two years to repay its debt, which according to Oleg Vassil, vice-president of the company, will happen in the nearest future. But according to Media Invest, Aeropag was a legal owner of the channel and could sell its stake as it pleased.

Some 20 journalists demonstrated near the parliament building to protest the company’s take-over. They said to know little about Media Invest and wanted the case to be impartially investigated. According to the Institute for War and Peace Reporting, Media Invest was set up only in August 2005 and does not have other commercial assets.

It is very well possible that developments at Pyramida have more to do with business interests than with an attempt at censorship. There are other such cases, where investor companies fight over profitable companies. The same is happening with Kyrgyzstan’s leading mobile phone operator, Bitel. Several companies claim ownership over the company. Among them is Russia’s Mobile Tele Systems (MTS), which bought a 50% stake of Bitel from Kazakhstan’s Alliance Capital for $150 million in early December. But a few days after announcing its purchase, not MTS but another company, Rezervspetsmet, was recognized as Bitel’s new owner by a court. Rezervspetsmet had bought shares of Bitel from Fellowes International Holding Ltd – which earlier in 2005 had been recognized by court as Bitel’s owner but was subsequently deprived of the company’s ownership. Representatives of Rezervspetsmet seized the building of Bitel once the decision of the court in their favour was announced; the building was already under the control of MTS. But personnel don’t seem to accept the latest developments. In the first week of January 2006, Bitel subscribers didn’t have to pay for services because the necessary staff to process payments didn’t show up for work in protest.

However, journalists at Pyramida think developments at their station have nothing to do with business. Instead, the authorities would be trying to silence them because of their critical coverage of Bakiev’s presidency. However, the press-secretary of the President denies any connection of Bakiev to this case.

To free the media from state interference was one of Bakiev’s promises before his election in July. As President, Bakiev said his government will restructure control over state-owned media outlets in order to make all Kyrgyz media independent.

Some Kyrgyz media have already been (re-)privatized since the March revolution. Among them are the country’s most popular newspaper, Vecherny Bishkek, and the popular TV station KOORT, which earlier was owned by Akaev’s son-in-low. On 8 December, the President announced that two out of three national papers, Slovo Kyrgyzstana and Kyrgyz Tuusu, plus eight regional newspapers, will be privatized. But some fear the authorities could maintain influence over the media through dummy companies buying up controlling stakes. More developments in the media are to be expected: at the end of December, a controlling stake of Vecherny Bishkek was offered for sale.

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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