Russian Collecting Society Announces Audit of Finances; New Director to Put Music Assets in Blind Trust
The Russian collecting society RAO has taken steps to shed its reputation for lack of transparency. The society has announced that it has ordered an independent audit of its finances, while the organization's newly installed general director Maxim Dmitriyev put his music industry assets in a blind trust "to avoid conflict of interest."
"RAO hired Russia's largest audit company FBK Grant Thornton to audit its financial accounting and distribution of collected cash among rights holders," the org said in a statement on its web site.
"Results of the audit will be presented to the board in late February," reads the statement. "If irregularities or wrongdoing on the part of RAO's previous management is discovered, general director Maxim Dmitriyev has the authority to file relevant complaints to the law enforcement agencies."
"Based on the results of the audit, proposals for financial recovery and reorganization of RAO will be prepared and presented to the board," Dmitriyev was quoted as saying in the statement.
Meanwhile, Dmitrieyev also took personal steps to avoid conflict of interest in his new position.
"Dmitriyev put his share in [the music television group] Bridge Media in a blind trust," a spokesperson for RAO told Billboard. "That will allow him to avoid conflict of interests with RAO, which he now heads."
RAO, Russia's state-approved authors' rights collecting society, has long been criticized for insufficient transparency of its procedures of collecting and distributing copyright royalties among rights holders.
Last June, the society took a major hit when its long-time general director Sergei Fedotov was arrested on suspicion of funneling money out of the organization.
Although Dmitriyev was appointed by the organization's board in late August, the country's justice ministry only confirmed the legitimacy of his appointment in December.
Still, the future of the entire Russian royalty collecting sector is up in the air as the RAO controversy pushed some government officials to propose that the state take control of the entire collecting industry. A final decision is expected to be made over the next few months.