6th June, 1997
Ronald Lauder and his European television company were sued for $750 million fo allegedly stealing Ukrainian television contract through political favours and bribery.
The suit, filed by Perekhid Media Enterprises Ltd. in New York, said Lauder and his Central European Media Enterpises Ltd. worked with a Ukrainian group known for its "criminal connections" and "corrupt methods" to take away Perekhid's 10-year TV contract with the Ukrainian govt.
Perekhid, a closely held Bahamian company with its principal business in Kiev, also said that Lauder and his TV company gave "improper payoffs to govt. officials, and "political favours in the form of removal of all independently produced news programming from nationally broadcast television in Ukraine."
Perekhid is seeking $250 m in compensatory damages and $500 m in punitive damages against Lauder and CME.
"We believe the complaint is legally and factually meritless and we will vigorously contest it," said Jerry Buckland, spokesman for CME (in London).
CME shares closed unchanged at 28 in Nasdaq trading of 183,700.
Lauder, who ran for New York mayor in 1989 and served as US ambassador to Austria, is also a top executive at his family's cosmetics co., Estee Lauder. He owns 22 per cent of CME stock and has 56 per cent of the voting power, the suit said.
(DESCRIPTION OF Studio 1 + 1)
"It is widely believed in Ukraine that, in return for their ouster of Perekhid and their award of the UT-2 contract to Studio 1 plus 1, senior govt. officials have been given a significant share of the ownership in Studio 1 = 1," the suit said.