OSLO, NORWAY -- (Marketwire) -- 08/16/08 -- (Fornebu, Norway - August 16, 2008) A court inthe Siberian city ofKhanty-Mansiysk, Russia shortly after 2 am Saturday morning localtime issued a verdict holding Telenor liable for USD 2,824,125,677 indamages plus RUR 460,000 in costs for allegedly having delayedVimpelCom's acquisition of Ukrainian Radio Systems, a small Ukrainianmobile operator. Telenor strongly believes the claimant Farimex isaffiliated with the Alfa Group and that the case has no merit.Telenor is confident it will prevail in reversing the decision onappeal.he lawsuit, which was filed by Farimex Products, Inc., a BritishVirgin Islands registered company, claims that Telenor delayedVimpelCom's USD230 million acquisition of Ukrainian mobile operatorURS WellCom by nearly one year.
"Today's decision comes as no surprise to us," said Jan EdvardThygesen, Executive Vice President and head of Telenor's Central andEast European operations. "This case has absolutely no merit, andthere have been numerous procedural irregularities in the court'sconduct of the case. We believe Farimex is affiliated with the AlfaGroup and we will pursue all possible legal remedies to vacate thisdecision. We are confident we will prevail on appeal. In other casesinvolving Alfa, Russia's higher courts have overturned spuriousrulings originating in regional courts with no relationship to theparties to the case," said Thygesen.
Farimex, which is incorporated in the British Virgin Islands, listsas its sole director, Dmitry Fridman, a cousin of Alfa Group ChairmanMikhail Fridman. In a Geneva arbitration claim filed in March 2008,Alfa Group subsidiary Eco Telecom made a claim against Telenor thatis nearly identical to the claim made by Farimex in Khanty-Mansiysk.Telenor filed a lawsuit in US federal court in New York in June 2008in an effort to force Farimex to arbitrate its claim in Geneva.
Although it says it owns only 25,000 VimpelCom ADRs, representing1,250 common shares (with a current market value of approximatelyUSD600,000 and constituting 0.002 per cent of VimpelCom's votingshares), Farimex claimed damages, initially, of nearly USD3.8billion, increasing the amount of its claim on August 8, 2008 to justover USD 5.7 billion. In keeping with Alfa Group's time-testedstrategy of collusive lawsuits, a number of Alfa entities were alsonamed as defendants in the case, including four which have norelationship or connection to VimpelCom. The court ruled that none ofthese defendants had any liability, and held that Telenor was theonly entity with liability in the case. The court stated that thedamages should be paid to VimpelCom. Although named as a third partyin Farimex's complaint, VimpelCom has not participated in the case.One of the four defendants, OAO "CT-Mobile" has its registered officein Khanty-Mansiysk, which was the only basis for Farimex to bring thecase there. Khanty-Mansiysk is a remote town in Siberia, 2,759kilometers east of Moscow, in Russia's largest oil producingprovince.
About URS
Telenor opposed VimpelCom's acquisition of URS because theacquisition was vastly overpriced and made no business sense. Inaddition, there was no transparency concerning the identity of thesellers of URS (who, to this day, have not been identified). URS hasbeen unprofitable ever since VimpelCom acquired it in November 2005,losing USD4.1 million in 2005, USD61 million in 2006 and USD59.6million in 2007 and requiring regular cash injections in order toremain in business. URS is the fourth mobile operator in theUkrainian market, with 4.8 per cent national market share in 2007,declining to 3.8 per cent as of June 30, 2008.
Telenor owns 33.6 per cent of VimpelCom's shares of common stock and29.9 per cent of VimpelCom's voting capital stock.
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Further information:
Dag Melgaard, Vice President Group Communications, Telenor ASA
tel: +47 901 92 000
e-mail: Email Contact
