Telenor to appeal Siberian verdict in collusive lawsuit instigated by Alfa
16 Agosto 2008 - 2:38AM
Marketwired
(Fornebu, Norway - August 16, 2008) A court in the Siberian city of
Khanty-Mansiysk, Russia shortly after 2 am Saturday morning local
time issued a verdict holding Telenor liable for USD 2,824,125,677
in damages plus RUR 460,000 in costs for allegedly having delayed
VimpelCom's acquisition of Ukrainian Radio Systems, a small
Ukrainian mobile operator. Telenor strongly believes the claimant
Farimex is affiliated with the Alfa Group and that the case has no
merit. Telenor is confident it will prevail in reversing the
decision on appeal.
he lawsuit, which was filed by Farimex Products, Inc., a British
Virgin Islands registered company, claims that Telenor delayed
VimpelCom's USD230 million acquisition of Ukrainian mobile operator
URS WellCom by nearly one year.
"Today's decision comes as no surprise to us," said Jan Edvard
Thygesen, Executive Vice President and head of Telenor's Central
and East European operations. "This case has absolutely no merit,
and there have been numerous procedural irregularities in the
court's conduct of the case. We believe Farimex is affiliated with
the Alfa Group and we will pursue all possible legal remedies to
vacate this decision. We are confident we will prevail on appeal.
In other cases involving Alfa, Russia's higher courts have
overturned spurious rulings originating in regional courts with no
relationship to the parties to the case," said Thygesen.
Farimex, which is incorporated in the British Virgin Islands,
lists as its sole director, Dmitry Fridman, a cousin of Alfa Group
Chairman Mikhail Fridman. In a Geneva arbitration claim filed in
March 2008, Alfa Group subsidiary Eco Telecom made a claim against
Telenor that is nearly identical to the claim made by Farimex in
Khanty-Mansiysk. Telenor filed a lawsuit in US federal court in New
York in June 2008 in an effort to force Farimex to arbitrate its
claim in Geneva.
Although it says it owns only 25,000 VimpelCom ADRs,
representing 1,250 common shares (with a current market value of
approximately USD600,000 and constituting 0.002 per cent of
VimpelCom's voting shares), Farimex claimed damages, initially, of
nearly USD3.8 billion, increasing the amount of its claim on August
8, 2008 to just over USD 5.7 billion. In keeping with Alfa Group's
time-tested strategy of collusive lawsuits, a number of Alfa
entities were also named as defendants in the case, including four
which have no relationship or connection to VimpelCom. The court
ruled that none of these defendants had any liability, and held
that Telenor was the only entity with liability in the case. The
court stated that the damages should be paid to VimpelCom. Although
named as a third party in Farimex's complaint, VimpelCom has not
participated in the case. One of the four defendants, OAO
"CT-Mobile" has its registered office in Khanty-Mansiysk, which was
the only basis for Farimex to bring the case there. Khanty-Mansiysk
is a remote town in Siberia, 2,759 kilometers east of Moscow, in
Russia's largest oil producing province.
About URS
Telenor opposed VimpelCom's acquisition of URS because the
acquisition was vastly overpriced and made no business sense. In
addition, there was no transparency concerning the identity of the
sellers of URS (who, to this day, have not been identified). URS
has been unprofitable ever since VimpelCom acquired it in November
2005, losing USD4.1 million in 2005, USD61 million in 2006 and
USD59.6 million in 2007 and requiring regular cash injections in
order to remain in business. URS is the fourth mobile operator in
the Ukrainian market, with 4.8 per cent national market share in
2007, declining to 3.8 per cent as of June 30, 2008.
Telenor owns 33.6 per cent of VimpelCom's shares of common stock
and 29.9 per cent of VimpelCom's voting capital stock.
Copyright � Hugin AS 2008. All rights reserved.
Further information: Dag Melgaard, Vice President Group
Communications, Telenor ASA tel: +47 901 92 000 e-mail: Email
Contact
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