Vimpelcom cries foul over 2001 tax bill

9 Dec 2004

Russia’s second largest wireless operator Vimpelcom has claimed that a demand for USD158 million in back taxes is politically motivated. Observers concur, agreeing that the tax demand – which relates to fiscal 2001 and equates to around three times the company’s net profits for that year – is a move against the Mikhail Fridman’s Alfa Group, 25% owner of Vimpelcom. Fridman is currently in dispute with Russia’s minister of telecommunications Leonid Reiman over Alfa’s ownership of a 25% stake in another cellco MegaFon; Reiman is widely acknowleged to have ‘links’ with MegaFon. Alfa Group’s purchase of the quarter share in MegaFon has been challenged in the international courts by IPOC, an offshore investment company. Bermuda-based mutual fund IPOC won a ruling in August, stating that it should be allowed to take a 25% stake in Russian cellco MegaFon ahead of Alfa. Its claims that it was entitled to the 25% stake because of option agreements made in April and December 2001 which gave it permission to buy Transcontinental Mobile Investment, a Bahamas-based company that owns CT Mobile, a Russian company with a 25% stake in MegaFon, were upheld by the tribunal.

Russia, Beeline (Russia), VEON