(FORTUNE Magazine) – AFTER LOSING HUNDREDS OF millions of dollars in a real-life Czech TV soap opera, Estée Lauder cosmetics heir and philanthropist Ronald Lauder got mad. Now he's getting even. Last month Lauder regained control of the Prague television station that had been effectively stolen from him by his Czech partner in 1999.

Lauder, a director of the cosmetics company founded by his mother, used some of his family's fortune to start a chain of tabloid TV stations in Eastern Europe in the mid-1990s. The Czech station, Nova, which launched in 1994 with a lineup of American sitcoms, Hollywood films, and high-voltage talk shows, was an immediate hit. But Lauder lost control in 1999, when he accused his local partner, Communist-era dissident and Kafka scholar Vladimir Zelezny, of diverting ad revenues to his own accounts. He ousted Zelezny, but the Czech, who held Nova's broadcast license, refused to sell it to Lauder's company, Central European Media Enterprises (CME). Instead he launched his own station on the same frequency, using Nova's logo and many of its programs.

Czech broadcasting regulators refused to stop the upstart station. CME broadcast its own version of Nova for several weeks on a giant screen in Prague's Wenceslas Square, then left town. Its stock dropped from a high of $36.75 to 69 cents in late 1999, and it was scrubbed from Nasdaq. A bitter Lauder placed a full-page ad in the New York Times urging investors to steer clear of Prague, and he sued the government for failing to protect his investment.

Two years ago the Czech government was forced to pay CME a $353 million award, plus interest. CME used most of the money to pay off debts that had left it contemplating bankruptcy. By then Zelezny, who had run into his own financial problems, was out of the picture, having sold the station to the opaque but politically connected Czech investment fund PPF. (Zelezny, now a Czech delegate to the European Parliament, faces charges of fraud and tax evasion in connection with Nova.)

In December, CME announced it would pay Nova's new owners $642 million in cash and shares for control of the station. But the deal has left some Czech watchers wondering why Lauder would jump back into the same pool of sharks. CME's new CEO, Michael Garin, a former investment banker at ING Barings, insists that the Czechs, now members of the European Union, must "answer to a higher authority." In addition, says Garin, ownership and oversight of CME's stations in Croatia, Romania, Slovakia, Slovenia, and Ukraine have been tightened.

Some think Lauder overpaid. "How do you sell this thing for $353 million and buy it back for $642 million?" asks David Kestenbaum, who follows CME for IRG Research in New York. Garin counters that the arbitration award wasn't equal to the full value of Nova, and that buying it back was the best thing a newly debt-free CME could have done with its cash. The station has about a 45% audience share and roughly 70% of local TV ad revenues. The market obviously agreed; shares rose $5, to $39, the week the deal was announced. But there was definitely one big loser, says Kestenbaum, referring to the taxpayer money that wound up in PPF's pockets: "Who made all the money on this deal? I'm sure it was PPF and their government friends. The citizens got screwed." -- Peter S. Green