News Corporation: A Farewell to Georgia?

In a new twist in the mysterious ownership saga surrounding Georgia's Imedi television station, media baron Rupert Murdoch's News Corp. has allegedly lost its management rights to the independent broadcaster. The company has not yet responded to the reports.

News Corp., which assumed a vaguely defined role at the television station in 2006, had earlier been touted by the government and opposition alike as a potential candidate to take over Imedi, following coup allegations brought against the station's founder, tycoon Badri Patarkatsishvili. [For background see the Eurasia Insight archive]. But Patarkatsishvili's February 13 death changed that scenario. Instead, the fight has moved to a struggle over who actually controls Patarkatsishvili's business interests, including Imedi. [For background see the Eurasia Insight archive].

Initial expectations had been that Patarkatsishvili's widow, Ina Gudavadze, would inherit the television station, known for its criticism of government policy. Station staff, in remarks to Georgian media, had earlier indicated that talks were being held between News Corp. and Gudavadze about Imedi's future.

Within the past few weeks, though, a new player has entered the scene: businessman Joseph Kay, also known as Ioseb Kakiashvili, reportedly a step-cousin of Patarkatsishvili, who has also claimed ownership of Imedi. Close to nothing is known about Kay, who reportedly is a US citizen, and who is styled by Georgian media as a former "business associate" of Patarkatsishvili.

That lack of clarity has done little to stymie Georgian television reports. The pro-government Rustavi-2 has consistently referred to Kay as Imedi's "new owner." Kay claims that he bought Imedi from JMG Consulting Group. According to the Georgian National Communications Commission, this company is a 65-percent owner of I-Media, which owns 100 percent of Imedi.

In late 2007, News Corp. announced that it would be taking over "management" of Patarkatsishvili's stake in Imedi for a one-year term. National Communications Commission documents, however, specify that the company itself holds no interests in Imedi -- only management rights. [For background see the Eurasia Insight archive].

In a March 25 meeting with Imedi staff, Kay, presenting himself as the station's new owner, stated that News Corp. would no longer exercise any management role, Georgian media have reported. Reasons for the decision -- or the legal basis for Kay to make such statements -- were not given.

News Corp. representatives in Tbilisi and New York City did not return repeated calls seeking comment.

The March 26 edition of Rezonansi, an opposition-friendly newspaper, has reported that Lewis Robertson, chief executive officer of News Media Caucasus, which handled News Corp.'s Imedi operations, will meet with corporate executives in Istanbul on March 27 to discuss the media giant's potential next move. The company has not confirmed the information.

Meanwhile, as News Corp. keeps silent, yet another character is supposedly lurking in the background: exiled Russian oligarch Boris Berezovsky, a close friend of Patarkatsishvili.
Saying that News Corp. has no business at Imedi, Kay told reporters on March 26 that "[a]s far as I'm concerned, News Corp. stands for [exiled financier] Boris Berezovsky. There is no place for Berezovsky here." He did not elaborate.

Berezovsky, for his part, has taken aim at Kay, dismissing the ethnic Georgian as a "swindler" and "imposter."

"I know this person for a long time and my very first experience of meeting with him showed that he is not an honest man, and I was telling this to Badri," Berezovsky, referring to Patarkatsishvili, said in a March 23 interview with Rustavi-2 from London. "But Badri, who was a strong individual, a strong businessman, was not paying too much attention to disloyal people because he always believed that he was able to control the situation."

Adding further to the confusion, Berezovsky indicated that he himself might have a stake in Imedi, which was part of an elaborate chain of companies. Claiming that he had "no separate businesses from Badri [Patarkatsishvili]," Berezovsky alleged that "it is not yet clear what is the situation with [my] assets in Georgia and also whether I own, or do not own shares in Imedi TV."

"[P]rofessional British lawyers," he continued, are looking into the matter.

At Imedi's offices, staffers appear to have mixed feelings about the ownership controversy. One senior Imedi reporter, who asked not to be identified, claimed that Kay paid an "unreasonable" amount of money to buy a controlling interest in Imedi. "It doesn't make sense to pay a hefty sum for an essentially loss-making company that has not been operating for so long," said the reporter. "I think there is more here than meets the eye, but I'm not sure if it is Berezovsky behind it, or some government official."

Close relatives of Patarkatsishvili have stated that his widow, Gudavadze, will pursue her claim to Imedi in court. "He [Kay] has no credentials to prove that he owns Imedi, which belongs to the family by right," the late tycoon's sister, Mzia Totladze, an opposition parliamentarian, told Rustavi-2 on March 23.

Whatever his claim, the appearance of Joseph Kay has unleashed a round of contentious speculation that he may be acting at the behest of President Mikheil Saakashvili's government.

Though Saakashvili has called for the station's reopening, opposition members and Patarkatsishvili's widow charge that Kay is a government front man who plans to turn the once-critical Imedi into a government mouthpiece -- a label Saakashvili's critics already apply to Georgia's three remaining major television channels, Rustavi-2, Mze and the Public Broadcasting Company.

In response, Kay has stressed that the channel will espouse an independent editorial line, adding that the coverage would be as it was before Patarkatsishvili's 2007 foray into politics as a presidential candidate. "The television station is not going to be either pro-opposition or pro-governmental," Kay told reporters on March 26.

In a separate development, Imedi General Director Bidzina Baratashvili announced on March 26 that the station expected to begin test broadcasts on April 1, with a return to full operations potentially by April 10.

A decision about renewing Imedi's broadcast license had been slotted for March 26. Under Georgian law, a broadcasting company can lose its license if it remains off the air for more than three months. The Georgian National Communications Commission announced March 26 that Imedi would retain its license.

The news, though, has done little to dint the anger of opposition party leaders, who have long called for Imedi's return to broadcasting. Charged Republican Party parliamentarian Davit Zurabishvili at a March 26 rally outside of Tbilisi: "What is happening around Imedi is nothing but [a] violation of freedom of speech."