Telenor hauled into Russian court over VimpelCom share purchase

The legal drama involving Nordic operator Telenor continued in Russia this week with authorities disputing the VimpelCom shares it purchased earlier this year.

In February, Telenor purchased 234 million VimpelCom preferred shares from Weather Investments for $374.4m, thereby increasing Telenor’s voting share in VimpelCom to 36.36 per cent. Now, Russian antitrust authority the Federal Antimonopoly Service of the Russian Federation (FAS) has filed a claim alleging that the share purchase and option transactions that it entered into with Weather Investments were illegal and violated Russian Strategic Investment Law.

The claim requests that the Moscow Arbitrazh Court, the principal commercial court in Moscow, invalidates the transactions, and Telenor return those VimpelCom shares to Weather Investments. The FAS names VimpelCom and holding company Altimo as “interested third parties” in the claim.

Telenor said that it has not yet been formally notified of the claim by the FAS or the court, but understands that the antitrust authority wants Telenor to strike a similar shareholders’ agreement to the one terminated by its venture partner Alfa Group last year, and until then, aims to prohibit Telenor from changing VimpelCom’s governing bodies.

Telenor spokesman Dag Melgaard said that that the operator believes it has fully complied with the Strategic Investment Law as it has been interpreted and applied to date.

“In addition, we have provided the FAS with all of the information it has requested.  There has not been any change of control in VimpelCom, nor is there any agreement between Telenor and Weather Investments concerning control of VimpelCom,” he said.

“We are open to a dialogue with the FAS, but we will defend Telenor’s position using all available remedies under applicable law and treaties.”

He added that, furthermore, Telenor is within the ownership range it has been before, and the transaction with Weather Investments reestablished the balance of shareholder interest which existed before Telenor’s ownership was diluted as a result of the Wind Telecom transaction.

The claim is the latest chapter in a long-running saga dispute with Altimo, which it had believed to have put to rest with the share purchase in February.

At the time of that purchase, the operator said in a statement that, because of the transaction, it had withdrawn all its existing legal claims against Altimo Holdings and VimpelCom and would work to expand the VimpelCom Board to eleven members.