Kazakh newspaper may be forced to shut down

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KAZAKHSTAN — On August 25, Oksana Makushkina, deputy editor of the Republic Business Review, said the newspaper was on the brink of closure and that its fate lay in the hands of the court. Should it find for the plaintiff, BTA bank, the court could order the paper to pay up to US$530,000 in damages, effectively forcing it out of business.

Initial court hearings began on August 19 after BTA bank rebuffed offers to settle out of court. The paper's owners do not have the funds to cover potential damages in a trial.

The bank sued the newspaper in late July for running an article on March 6 with the headline, "Horseradish No Sweeter than Turnips," asserting that the bank was “doomed."

"The largest privately-held bank in Kazakhstan and the CIS, built from the ground up as an international business corporation, has adapted poorly to government takeover. Incidentally, persistent rumours are flying around at BTA that some of the new managers are eager to declare bankruptcy, since they would profit greatly from rehabilitation procedures, bankruptcy proceedings and debt restructuring," the paper wrote.

The plaintiff stated that the bank subsequently lost $40 million in deposits by March 31, and demanded that the paper's owners, editor-in-chief and author of the article pay a total of $530,000 in damages.

Since February, BTA's chief shareholder has been the government, which, according to its Memorandum on Bank Stability, was required to intercede when BTA’s operating capital proved insufficient to meet its financial obligations.

This is not the first time a media outlet has been forced out of business in this way. On January 16, the Medeus District Court ruled that another opposition newspaper, Taszhargan, owed $2 million to parliamentary deputy Romin Madinov in psychological damages.

[Adilsoz.kz, Azattyq.org, Dw-world.de, Zonakz.net, Respublika-kaz.biz]