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CR ordered to pay CME $353 million in Nova fight

U.S.–based Central European Media Enterprises (CME), the former investor in Czech commercial station TV Nova, said Friday that arbitrators in the dispute between CME and the Czech Republic will order the government to pay CME $353 million (Kc 10.5 billion) in connection with the government's failure to protect CME's investment.

CME's PR representative Michal Donath confirmed that the arbitrators' March 6 decision was sent to CME late Friday.

On August 5, 1999, TV Nova's former servicing organization Ceska Nezavisla Televizni Spolecnost (CNTS), CME's vehicle in the Czech Republic, halted its operations in the country after the station's license holder, CET 21, severed its relations with CNTS.

Controlled by TV Nova's boss, the current Senator Vladimir Zelezny, CET 21 decided to kick CME out of the market after arguments between Zelezny and CME's management over salary and Zelezny's keenness to keep his program "Call the Director" on the air.

By the time Zelezny had pushed out the station's original investors, TV Nova had already secured the biggest audience in the country and the largest advertising revenues.

In February 2000 CME launched arbitration proceedings against the Czech government claiming that the Czech state failed to protect CME's investment. After hearings in Stockholm, the arbitration court ruled in Sept. 2001 in CME's favor.

The second phase of the arbitration continued in London only to determine the amount of damages the Czech government would have to pay. CME wants the Czech Republic to pay $526.9 million (more than Kc 15 billion) for its lost investment in TV Nova.

The Czech Republic appealed the ruling in CME's favor, claiming that the arbitration didn't comply with procedural rules. However, legal experts and arbitrators said the decision could not be appealed.

Another dispute between CME's founder, American billionaire Ronald Lauder, and Zelezny was apparently settled last year when the Czech financial group PPF paid Lauder some $29 million (Kc 870 million) that Zelezny allegedly owed him. PPF thus secured control of half of CET 21.

Elected senator in October last year, Zelezny remained general manager of TV Nova. After the mandates and immunity committee voted in January to strip him of parliamentary immunity, police resumed Zelezny's prosecution.

Zelezny is charged with attempting to harm CME, tax evasion and suspicious transfers of property to several companies in order to avoid the freezing of his assets during prosecution.

(PBJ 17.iii.03)

 
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