ELTA shares to change hands

  • 2002-12-19
  • Tony Pappa

Shares in ELTA, the former state-run news agency, will be up for sale starting Dec. 22 as originally planned despite proposed amendments aimed at delaying any share sales until 2006.

Several members from Parliament's economic and information committees said that this was a bad time to allow the sale to proceed since, in their opinion, ELTA might cease operating as a news agency.

"Our goal was to prolong the process as much as possible," suggested Birute Vesaite, a member of Parliament's economic committee.

"Some of our members have real doubts that ELTA plans to continue in the information business. But in the end, the majority in both committees thought otherwise," said Vesaite.

The December sale date was originally designated in a 1996 law governing the sale of ELTA shares and facilities. The law provided a stipulation allowing for media companies to purchase part of ELTA with the caveat that they obliged to hold onto the shares for six years - a term which expires this month.

Doubts about the future of ELTA's business arose when it was discovered that the news agency was leasing part of its downtown facilities to a gaming business and that some shares in the company had already been transacted before the designated December date.

Parliamentary member Sigita Burbiene, who authored the amendments, said she feared a change in ELTA's core business could lead to a monopoly situation in the media industry.

"I know the persons who are buying the shares," said Burbiene, referring to MG Baltic.

"The company MG Baltic is interested in [ELTA's] property and certainly not in the information system. As we know from our history, there are people who think about money and not about other things. They do not care if the Lithuanian media becomes a monopoly."

Kestutis Jankauskas, general director of ELTA, disputed the point of view.

"Our main business is news. It hasn't changed," Jankauskas told The Baltic Times. "We are only renting part of our building to another joint stock company."

Baltic News Service reported Dec. 3 that Ifanta, a MG Baltic-owned company, controls 48.89 percent of the ELTA news agency under a trust agreement.

Ifanta reportedly specializes in textiles, real estate, hotels and entertainment.

Jankauskas clarified the exact figures, stating that Ifanta owns roughly 20 percent of the shares, though the company holds by proxy the remaining percentage.

It is the remaining 28 percent that bothers Burbiene.

"The problem is that MG Baltic has already bought the shares, though the law doesn't allow [the sale or purchase] until Dec. 22," she said. "Formally they say they have not, but we know for a fact that they have already paid up to 10 times the share value, especially in small cities where media companies are struggling."

The Lithuanian government still owns nearly 40 percent of the company's shares.

It is a stake, suggested Vesaite, that the government plans to hold onto.

"Selling the government shares now is out of the question," said Vesaite. "With the debate surrounding the amendments, I am not perfectly sure which solution was the best. But we plan to hold onto our stake."

Raimunas Sukys, chairman of Parliament's legal affairs committee, has raised the issue of the constitutionality of the proposed amendments to the privatization law. Vesaite herself admitted that she was not entirely sure if the amendments were constitutional, and there might have been some conflicts within the rules of law.

The constitutionality debate was pushed aside when the amendments failed in committee, clearing the way for the free trade of shares starting on Dec. 22.

According to Burbiene, the draft was simply defeated despite early support in favor of its passage.

"Now nobody is sure that the new owners will head in the same direction as [the company] is going now," she said. "Not in the next year or two, especially after new elections."

Still, ELTA director Jankauskas said he was comfortable with the company's affiliation with MG Baltic. He stressed that ELTA will remain in the news business.