MOSCOW/LOS ANGELES, Feb 20 (Reuters) – Russia’s anti-monopoly agency on Friday blocked Walt Disney’s (DIS.N) local venture, derailing the media giant’s plan to create a free-to-air channel for Russian families, local media reported.
In a statement, the anti-trust body said it rejected the venture after it was given false information by the parties applying to create Mo-Tv Holdings Ltd, which Russia’s Interfax news agency identified as the Disney project, citing sources close to the deal.
A Disney corporate representative could not be reached immediately for comment.
The ruling is a setback to Disney’s aggressive efforts since Chief Executive Robert Iger took over in 2005 to move into the Russian and Eastern European markets, which had been expected to buck the global economic downturn and offset slower growth in the company’s more established markets.
Disney had been counting on the free-to-air television channel to raise brand awareness and support the local retail, theatrical distribution, licensing, mobile and Internet businesses it already operates in Russia — a strategy it has employed successfully in China and India.
Disney announced plans in December to take a 49 percent stake in a Russian joint venture with Media-One Holdings Ltd, pledging to provide the channel with cash and programming, as well as marketing expertise.
Under Russia’s strict laws governing the airwaves, foreign investors must have a local partner, and Media-One was to hold a 51 percent stake in the nationwide venture.
“The information and documents presented did not have all of the information necessary to make a decision with regard to statute 33 — On protecting competition,” the agency said in a statement.
“Moreover, the documents, presented to the Federal Anti-Monopoly Service of Russia included false information,” it added in explanation of the move.
The agency’s statement said it was blocking the acquisition of a 49 percent stake in Mo-Tv Holdings Ltd by Catalpa Investments Ltd, which Interfax news agency reported to be a unit of Walt Disney. (Reporting by Simon Shuster in Moscow and Gina Keating in Los Angeles; Editing by Andrew Macdonald)