Friday, January 18, 2008

No News Can't Be Good News: A Commentary

By: Ross Hendin, Hendin Consultants

The many readers of the blog may have noticed something important in the last week or so... or maybe they didn't know, and that's even more important: the coverage of Crawford Committee developments has slowed down totally. Is it because you, the noteholders and industry-insiders have lost interest? Is it because the media has decided that there are better things to cover? Is it perhaps that the global credit-crunch is just hogging precious news real estate?

No. It's because the Crawford Committee hasn't released any news, and is probably also not commenting on developments happening in the country that noteholders want answers to. They can tell that avoiding the media doesn't mean the story will run with a line somewhere that says "Mr. Crawford was not available for comment and / or didn't take our call". Quite the contrary. Our reporters do a very good job of reporting on fact, and not rumor. The downside for the public and the noteholders is that with so little information about the Committee's actions actually seeing the light of day, all that the public have are rumors and speculation about what will happen.

I've said it before, and I'll say it again now that we are seeing another clear indication that there is no clear indication - the communication strategy being employed here is being done very carefully, and is working very well. When was the last time you saw "good news" released on Christmas Eve at 12.30 PM as opposed to at 9 am when there was a chance for reporters to make deadline on one of the slower days of the year?

It was discovered not two days later that the bank assessing the assets and setting the spread for the notes is also the mystery bank set to fund if no other banks come to the table. I wonder if other banks are even going to be able to see the assets they for which they would provide the margin facility.

The diligence with which the Committee keeps critical information away from the noteholders, let alone the public, is truly disappointing in a country with a rule of law.

Let's compare the news on Christmas to another, slightly more high-profile case where the same thing happened:

This article in the Telegraph gives an account of a famous Russian energy company expropriation case. This case is seen by some to be the definitive turning point in post-modern Soviet history - the point where authoritarianism started to return to Russia. As this recent article alludes to, the Russia propaganda machine is known in PR circles to be among the most effective in the world, and the Kremlin joins with state owned energy major Gazprom in spending in excess of $11 million USD in the next three years on foreign Public Relations alone.

The Russian Purocracy (equivalent of our DA / Crown Attorney) announced a decision to continue the unlawful detention of Mikhail Khodorkovsky (the CEO of Yukos, the energy company at the centre of the expropriation) on December 23, 2003, on the assumption that it was close enough to Christmas nobody would care about the detainment, but at the same time not wanting to look too shameless about the timing.

I really hope that the Committee can wake up to the reality that the public and the media are watching this, and that a more open approach is a more elegant and public-friendly way of accomplishing what I am sure is a hard enough task as it is.

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