Russia's Collecting Societies Deny Funneling Millions From Now-Shuttered Bank

All three major Russian collecting societies -- RAO, RSP and VOIS -- are being accused involvement in funneling $70 million from the now-defunct local lender Mostransbank. The collecting societies have denied the accusations.

Russia's banking watchdog agency claimed that the three organizations were allegedly involved in a scheme in which payments were made to makeshift companies under fake loan agreements with the lender. Thanks to the scheme, 1.84 billion rubles ($70 million) was funneled out the bank, the agency insists.

A spokesperson for RAO has denied any wrongdoing. "RAO had an account at Mostransbank," she told Billboard. "But RAO never had any loan agreements with the bank."

The state-approved authors' rights collecting society never made any payments to companies mentioned by the banking watchdog, she added.

Oksana Levashova, financial director RSP and VOIS, told Billboard that both organizations reported irregularities with their Mostransbank accounts in October 2015. "We support the idea thoroughly examining the circumstances bankruptcy Mostransbank and we are ready to fully cooperate with law enforcement agencies in that issue," she added.

VOIS is the state-approved neighboring rights collecting society, while RSP collects a one-percent tax on imports electronic devices that can be used for copying content.

The accusations come at a perilous time for Russia's collecting industry, which faces criticism for a lack transparency in operation and reporting.

RAO has taken most the heat, and its general director Sergei Fedotov has been imprisoned since late June on suspicion funneling money out the organization.

As the government is mulling various scenarios for the future the embattled collecting sector, including putting a government agency in charge copyright royalty collection, RAO suggested earlier this month that a government-owned media company should take over control the organization.