Vimpelcom granted stay of execution amid growing concerns over impartiality

26 Jan 2004

Russia’s largest cellco Vimpelcom has managed to obtain a court injunction delaying the withdrawal of its licence by the country’s telecoms regulator, Gossvyaznador, just days before a government economic advisor hinted that a personal vendetta could be the motivation for the regulator’s actions. On 9 January Gossvyaznador warned Vimpelcom’s wholly owned subsidiary KB Impuls that it would withdraw its operating licence on 1 February for failing to meet its licence obligations. Gossvyaznador claims that KB Impuls is contravening Russian law on two counts related to technical details in its subscriber contracts. But on the 22 January Vimpelcom announced that a Moscow court has suspended Gossvyaznador’s actions pending the results of KB Impuls’ counter-suit which is seeking to invalidate the regulator’s claims.

Fanning the flames of discontent, Andrei Illarionov, President Putin’s top economic advisor, refused to assure concerned investors at the World Economic Forum that Gossvyaznador’s actions were neither personally nor politically motivated. Speaking in Davos, Mr Illarionov did little to stem growing concern over fairness in Russia’s judicial and regulatory system by saying: ‘If you want assurances that the attack is not a personal attack, I could not give you such an answer’. The action against Vimpelcom is believed to have stemmed from a commercial dispute related to a decision by the cellco’s 25%-shareholder Alfa to acquire a 25% stake in rival operator MegaFon last summer; MegaFon was established with the help of a company set up by telecoms minister Leonid Reiman.