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WATCHDOG CONCERNED ABOUT FUTURE PLURALITY OF PRESS

Penta wants to buy Petit Press

THE PROSPECT of the financial group Penta buying its way to Petit Press publishing house has prompted concerns about journalistic independence in the 21-year-old group, which publishes a major daily Sme, Új Szó, Slovakia’s only Hungarian-language daily, and the regional daily Korzár, and is the majority owner in The Slovak Spectator.

THE PROSPECT of the financial group Penta buying its way to Petit Press publishing house has prompted concerns about journalistic independence in the 21-year-old group, which publishes a major daily Sme, Új Szó, Slovakia’s only Hungarian-language daily, and the regional daily Korzár, and is the majority owner in The Slovak Spectator.

The outcome of negotiations over the 50-percent share put on sale by the Rheinisch–Bergische Verlagsgesellschaft (RBVG) were not know by the time The Slovak Spectator went to print on the evening of October 9, the day when the deadline elapsed for the Prvá slovenská investičná skupina (PSIS), a subsidiary of Czech investment holding Proxy-Finance, to use its pre-emption right to purchase RBVG’s shares.

Already on October 8 the SITA newswire used its own news portal to publish a statement by representatives of SITA and Penta, in which they claim that in case of the acquisition they would guarantee free and independent work for reporters of Petit Press.

Sme Editor-in-chief Matúš Kostolný is sceptical about the group keeping its promise in case of its entry to the publishing house.

“Their previous behaviour proves that they cannot guarantee journalistic freedom and independence,” Kostolný said, adding that the group in past already tried to stop critical texts even with the help of courts.

An informal pledge from RBVG has been made, promising not to sell the media properties to any of Slovakia’s major financial groups, some of whom are regularly accused of manipulating politics and other sectors for financial gain. The current deal centres on the claim that Penta is taking part in financing the purchase price and thus it is a financial partner: “Penta isn’t directly or indirectly a possible acquirer of the shareholder package in the Petit Press publishing house”, SITA wrote.

However, one of the partners at Penta, Jaroslav Haščák, gave an interview to journalist Tom Nicholson, who published it on his blog earlier in September. In the interview, Haščák admitted they had “four other media aims” the company was targeting.

Haščák indirectly admitted in the interview that Penta was looking into buying Petit Press shares, and that the transaction is planned to take place by first purchasing the shares via the SITA, a privately owned agency. However, he repeatedly stated that he could not comment on the transaction due to the confidentiality agreement between SITA and RBVG.

Penta, which has been active since 1994, has seen its activities valued at €6.5 billion.

The Czech media news portal Motejlek.com broke the story on September 9, claiming that the current German owner of 50-percent stock in Petit Press, RBVG, is looking to sell its share and that it has already closed an agreement with Penta over the price for the stock.

The Petit Press general director, Alexej Fulmek, responded on October 8 that the document published by SITA was still preliminary and that negotiations over the purchase and its method were still ongoing and it was not possible to predict the outcome, according to Sme.sk.

Earlier Fulmek responded to the information on Penta’s efforts that while Penta’s interest in buying the shares in Petit Press is legitimate, it would “harm the image of the publishing house”.

“Initially, it would not mean any change for the operations within the publishing house, but I cannot estimate what would happen later on,” Fulmek told The Slovak Spectator.

Meanwhile, the Fair-Play Alliance (FPA), a political ethics watchdog, initiated a petition calling on RBVG to reconsider the sale of their 50-percent package to Penta arguing that Sme has been from its very inception “an extraordinarily important symbol of public service, which proved crucial for the protection of democratic values”. The letter, which petitioners are able to sign by their name and email address, and thus send it to the German shareholders, also reads that “if by Penta’s entry to one of the last strongholds of free journalism in Slovakia falls, it will be a very sad anniversary of the Velvet Revolution”.

The FPA stressed that not only the financial crisis, but also the disintegration of basic democratic values in the new member countries of the European Union, could have a devastating effect on the whole of Europe, expressing the hope that the group does not view the publishing of newspapers only as a “valueless tool to create profit” but are aware of the public service provided by the media.

Sme ran an interview with Johannes Werle of RBVG, who since 2012 has been responsible for the company’s activities in the Czech Republic, Slovakia and Poland. Among the questions was whether the German shareholders are aware that their decision might result in the deformation of the media market in Slovakia.

“Our company has a very responsible approach to the issues and we will consider all the aspects,” Werle told Sme on October 6.

The news that Penta eyed Petit Press emerged shortly after it was officially announced that the group purchased two other publishing houses, Trend and 7 Plus, and will thus control periodicals like the Trend business weekly, the Plus Jeden Deň tabloid daily and the Plus 7 Dní tabloid weekly.

Meanwhile, Omédiách.com reported that Penta is working on a number of acquisitions including the purchase of the news-only television TA3. The company CEN, which is the license holder is part of the Grafobal group owner by businessman Ivan Kmotrík.

Konštantín Čikovský, deputy editor of daily Sme on September 23 wrote that today’s oligarchs do not seem to understand that in the time of Facebook the ownership of media will not shelter them from their murky business practices from being widely publicized.

According to Čikovský, if Penta cared only about business they would not even try to buy Petit Press.

“The purchase of media by Penta is not only a regular investment, but mainly an attempt to influence the balance of power in Slovak politics in the widest sense of the word,” Čikovský wrote in his piece.

In September, Penta took steps that suggest the media division is going to be in the group’s focus in the near future. On September 23, the group hired a new manager to oversee Penta’s media investments, an experienced executive Tobias Schulz-Isenbeck, who previously worked as CFO at the Swiss publishing house Ringier AG and an executive director at Verlagsgruppe Handelsblatt in Dusseldorf, Germany.

Press freedom concerns

Concerns are also reinforced by the fact that Penta was mentioned extensively in the infamous Gorilla file, an unverified transcript purporting to originate from conversations covertly recorded by the country’s SIS intelligence service between 2005 and 2006.

Haščák’s name is featured in the Gorilla file in association with conversations he is alleged to have had with senior officials and politicians from the ruling coalition in 2005 and 2006, mainly about privatisation and the provisions from the sale of state property. Penta has denied Haščák’s involvement.

The Gorilla file also mentions the name of one of the owners of SITA, Igor Grošaft, who allegedly participated in representing Penta’s interests in talks with politicians.

Haščák, in 2012, sought a preliminary injunction to block the publication of an unfinished book about alleged high-level political corruption being written by Nicholson. The widely criticised injunction proved relatively short-lived as the Bratislava Regional Court overturned a temporary restraining order issued by the Bratislava I District Court to block the publication of the book, an act described by at least one media freedom watchdog as censorship.

Other concerns pertain to developments in the neighbouring Czech Republic, where Slovak-born billionaire Andrej Babiš acquired a number of media outlets, including the influential daily Mladá fronta dnes. Babiš, who tops the politician popularity rankings, now serves as the country’s finance minister, and is considered one of the most influential men in the country.

In Slovakia, Babiš owns the publisher of the Hospodárske Noviny daily. Another business tycoon, Ivan Kmotrík, controls the TA3 news-only TV channel, while another major investment group, J&T, owns the JOJ TV channel and has links to the Pravda daily.

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