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New scandal for Russian collecting societies
By Chris Cooke | Published on Thursday 29 December 2016
If you’ve been enjoying the controversies surrounding the Russian collecting society RAO over the last eighteen months, well, here’s a new controversy, and this one involves Russia’s other music rights organisations RSP and VOIS too. Woo!
According to Billboard, all three collecting societies have been accused by the Russian banking watchdog of involvement in a scam that funnelled in the region of $70 million out of the now defunct Mostransbank. The finance authority alleges that the societies had fake loan agreements with the lender via which money was transferred into makeshift companies.
But all three societies strongly deny the allegations. The song rights focused RAO says it had an account with Mostransbank but no loan agreements. Meanwhile a rep for both the recording rights focused VOIS and private copy levy collector RSP told Billboard that both organisations had reported irregularities with their Mostransbank accounts in 2015, and that they now looked forward to cooperating with law enforcement officials as they investigate the circumstances that led to the collapse of the banking business.
As previously reported, RAO was accused of embezzlement in September 2015, resulting in its General Director Sergei Fedotov being arrested and jailed. That scandal led to new proposals that a government agency take over the collective licensing of music rights in the Russia in place of the industry’s three societies.
The music community has in the main opposed that proposal, with reps from the Russian divisions of Warner Music, Universal Music and Sony Music amongst those to speak out against government-controlled collective licensing in an open letter that claimed going that route would contravene global copyright treaties.
Though, earlier this month the RAO itself proposed that a government-owned media company take control of the organisation, telling Billboard that such a move was now desirable because the society is “facing administrative and financial issues”.
