Russian authorities snatch VimpelCom stake

13 Mar 2009

In the latest development in a long running battle, a Russian bailiff has seized Norwegian telco Telenor’s 29.9% stake in Russian cellco VimpelCom. In February a Russian court ruled in favour of Fairmex and ordered Telenor to pay USD1.7 billion in damages for delaying VimpelCom’s takeover of a Ukrainian mobile operator, URS, in 2005. Telenor promptly responded that it had no intention of paying the fine and would appeal the court’s ruling. It has been alleged that Fairmex is merely a front for Russian billionaire Mikhail Fridman’s Alfa Group, Telenor’s shareholding partner in VimpelCom – which the Russian firm denies.

Telenor said the VimpelCom shares were seized as a ‘retailiation’ shortly after a US court ruled to fine Altimo, Alfa’s telecommunications unit, for not obeying a 2008 decision, which ordered it and its affiliates to sell their interest in Ukrainian cell company Kyivstar within 90 days. Altimo and Telenor, the majority shareholder of Kyivstar, have found it hard to work in partnership at Kyivstar for many years.

The confiscation of the stake ‘is yet another escalation of the attempts to steal our VimpelCom shares with the aid of Russian courts,’ Jan Edvard Thygesen, Telenor’s head of central and eastern Europe operations, said in a statement. Altimo vice president Kirill Babayev countered with his own statement saying, ‘We respect the court’s decisions and will follow them, but we think that this [US court] decision conforms with Telenor’s interests and goals to illegitimately strip Altimo from its share in the Ukrainian operator.’