Farimex attacks Telenor also in Ukraine
18 Mayo 2009 - 3:08AM
Marketwired
(Fornebu, Norway, Kyiv, Ukraine, - 18 May 2009) Farimex, reputed
from attacking Telenor's investments in the Russian mobile operator
VimpelCom, is also behind an investigation launched by the
Anti-Monopoly Committee of Ukraine (AMC) against Telenor and
Kyivstar. Telenor was officially notified of the commenced
investigation on 7 May this year. Farimex Products is registered on
the British Virgin Islands and claims to hold ADRs representing a
0.002 per cent stake in VimpelCom.
"Telenor is a strong defender of competition and believes the
AMC has been sadly misled by Farimex," said Jan Edvard Thygesen,
EVP and Head of Telenor's operations in Central and Eastern Europe.
Farimex claims that Telenor, Kyivstar and Storm are in breach of
Ukrainian Competition legislation by including a non-participation
clause in the Shareholders agreement and that Telenor hindered
competition in Ukraine through delaying VimpelCom's acquisition of
Ukrainian Radio Systems (URS).
Promoting competition
"Non-participation clauses are normally included in agreements
between partners world-wide, so too between the Kyivstar
shareholders in the agreement signed in 2004. This was done in
order to promote fair competition and avoid monopolisation of the
market. The agreement restricts each party from holding more than
five per cent in competing businesses in Ukraine without the other
party's consent. It regulates affairs between two shareholders, and
in fact opens up for more actors in the market, rather than
restricts competition," said Trond Moe, Country Manager of Telenor
Group Ukraine.
The URS transaction
"Telenor has always supported VimpelCom's international
expansion, also to Ukraine, on terms favourable to VimpelCom and
its shareholders" said Trond Moe. "Our major reason to go against
the acquisition of URS in 2005 was to prevent VimpelCom from losing
money through an overpriced and non-transparent acquisition.
Unfortunately we have been proven right in our assumptions that the
company would require huge investments to cope with an already
maturing Ukrainian market. At present Beeline continues to show
little growth in Ukraine, having a market share of only 3.4 per
cent and just over two million subscribers despite additional
investments by VimpelCom of more than 600 million USD so far."
URS was acquired by VimpelCom in 2005 at a price of 231 million
USD after having been unsuccessfully offered to Golden Telecom at a
price of 100 million USD at an earlier stage. In the Board of
Directors of VimpelCom, Telenor-appointed board members argued
against the acquisition for three reasons; a too high price,
unidentified sellers and non-credible business plans presented for
URS development.
"Telenor, as one of the world's largest operators, is always
guided by good business logics and high ethical standards. That is
why Telenor did its best to prevent VimpelCom and its shareholders
from loosing money in Ukraine. We are confident the AMC will
consider this and discard the unfounded accusations set forth by
Farimex," said Mr. Thygesen
Background
Last summer Farimex initiated a court proceeding against
Telenor, VimpelCom and Altimo in a distant court of Khanty-Mansiysk
in Western Siberia, Russian Federation. Farimex accused the three
companies of having caused losses to VimpelCom by delaying
VimpelCom's acquisition of URS. The Khanty-Mansiysk court held
Telenor solely liable for VimpelCom's alleged late entry into the
Ukrainian mobile market and ordered Telenor to pay VimpelCom USD
2.8 billion in damages.
This decision was cancelled by the Omsk court on 29 December
2008. However, on 20 February 2009 the court ruled to hold Telenor
liable for USD1.7 billion. The court gave Farimex a writ of
execution to claim the amount that resulted in arrest of all
Telenor shares in VimpelCom on 11 March 2009. Telenor has appealed
the decision of the Omsk court and the appeal will be heard in
Tyumen in Western Siberia on 26 May 2009.
Contact persons:
Dag Melgaard, Communication Manager, Telenor ASA
tel: +47 901 92 000, e-mail: dag.melgaard@telenor.com
Anastasiya Gogoleva, Communication Director, Telenor Group in Ukraine
tel: +38 067 467 6666, e-mail: anastasiya.gogoleva@telenor.com
Anna Ivanova-Galitsina, PR and Communications Director, Telenor
Russia
Tel: +7 495 937 9588
E-mail: anna.galitsina@telenor.com
To editors:
See also Telenor's special web-pages "Defending investments in Russia
and Ukraine":
http://telenor.com/en/news-and-media/in-focus/ownership-interests-in-russia/
This announcement was originally distributed by Hugin. The
issuer is solely responsible for the content of this
announcement.
Copyright � Hugin AS 2009. All rights reserved.
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