Modern Times Group issued a formal notice that its subsidiary business in Russia, CTC Media, could fall foul of Russia’s proposed new media law which passed its first reading in Russia’s parliament on September 23rd. The new rules propose limited foreign ownership of media within Russia to 20 per cent. MTG owns 38 per cent of CTC Media, and MTG has other broadcasting interests in Russia.
CTC, in a statement issued September 25th said: “CTC MediaRussia’s leading independent media company, has noted the proposed amendments to the Russian law “On Mass Media” that passed the first reading on September 23, 2014. The Company notes that the proposed law, if enacted in its current form, would limit direct or indirect foreign ownership of Russian mass media businesses, and applies to both existing and future foreign ownership interests. The law would come into force on January 1st 2016, by which time, according to the existing version of the proposed amendments, each Russian mass media entity, including television broadcasters, would have to comply with the requirement that non-Russian entities and individuals in the aggregate beneficially own no more than 20 per cent of the relevant mass media entity. Russian entities and individuals that beneficially own more than 20 per cent of Russian mass media businesses through off-shore holding structures will have an additional year until January 2017 in which to restructure such foreign holding structures.”
The new rules are being ‘fast tracked’ through the Duma, and the Bill’s 2nd Reading is scheduled for today, September 26th.