SCM ready to defend its Ukrtelecom ownership rights in court

25 May 2017

The Ukrainian Prosecutor General’s Office (PGO) has finalised a pre-trial inquiry into alleged illegalities in 2011’s privatisation of national fixed line operator Ukrtelecom, and will try former Ukrainian President Viktor Yanukovych, former Prime Minister Mykola Azarov and former Finance Minister Yuriy Kolobov in absentia, the Kyiv Post reports. A PGO statement to reporters said: ‘Regarding Azarov, we have indeed finalised the inquiry into the embezzlement of UAH220 million (USD8.3 million) in the course of Ukraine’s special communication system project. Yanukovych personally gave instructions to Azarov, who passed the instructions to the finance minister; they illegally submitted budgetary amendments, the parliament voted in their favour, and the money was assigned from the state budget.’ TeleGeography notes that the ‘special communication system project’ referred to in the PGO’s statement was one of the obligations contained in the privatisation contract between Ukraine’s State Property Fund (SPF) and Ukrtelecom’s private sector purchasers (originally Austrian fund Epic). The politicians in question fled to Russia in early 2014.

Ukrtelecom’s current controlling shareholder, domestic conglomerate System Capital Management (SCM Group) – which bought Epic’s stake in 2013 – has reiterated its readiness to protect its ownership rights over the telco and its 100%-owned mobile subsidiary TriMob. The Kyiv Post quotes a statement from SCM in connection with the PGO’s inquiry/trial announcement: ‘As a controlling shareholder and owner of PJSC Ukrtelecom and its subsidiary 3Mob LLC, SCM Group is interested in an objective and independent investigation into all the circumstances of the privatisation … SCM Group did not participate in the privatisation … but acquired this asset from its previous owners in 2013. At the same time, SCM will certainly protect its ownership rights to the shares and corporate rights of PJSC Ukrtelecom and 3Mob LLC in court.’

Ukraine, Ukrtelecom (incl. TriMob)