Reuters: Regulatory News: UPDATE 1-Russia seeks to undo Telenor's VimpelCom stake hike

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UPDATE 1-Russia seeks to undo Telenor's VimpelCom stake hike Apr 19th 2012, 07:36 Thu Apr 19, 2012 3:36am EDT OSLO, April 19 (Reuters) - Russia's antitrust authority has filed a claim in a Moscow commercial court alleging Telenor's February purchase of VimpelCom shares was illegal and it would seek to undo the deal, the Norwegian telecoms company said on Thursday. The claim is the latest step in a long-running corporate battle over how mobile phone operator Vimpelcom should be run, that has come to typify the difficulties faced by overseas investors in Russia's oligarch-controlled business world. The claim alleges that the deal violated the Russian Strategic Investment Law and the authority wants Telenor to return the shares in VimpelCom, the Norwegian state-controlled firm said in a statement. The authority wants Telenor to strike a similar shareholders' agreement to the one terminated by its venture partner Alfa Group last year and until then, seeks to prohibit Telenor from changing VimpelCom's governing bodies. Telenor wrested back partial control of VimpelCom from Russian oligarch Mikhail Fridman's Alfa Group in February in a surprise move that aimed to give it more say over strategy but threatened to extend a long-running corporate battle. Telenor then bought 234 million shares in VimpelCom, boosting its voting share to 36.36 percent from 25 percent and meaning it no longer had to go ahead with court proceedings against old adversary and fellow shareholder Altimo, a unit of Alfa Group. The battle between Telenor and Alfa had heated up last year when Alfa cut its stake to below 25 percent, thereby voiding the shareholder deal and allowing a board reshuffle. Telenor challenged the move, saying it believed the share sale was to another entity controlled by the same owners, and filing a claim seeking to uphold the agreement. A shareholder agreement between Altimo and Telenor had given Telenor pre-emptive rights to maintain voting control in the event of a shift in ownership structure but it lost that right with the invalidation of the shareholder agreement. Vimpelcom's Russian owners had been pushing for overseas expansion, including a purchase of a majority stake in Egypt's Orascom and Italy's Wind. But Telenor argued the acquisition would saddle the group with too much debt and distract it from recouping market share in Russia while unfairly depriving Telenor of some control. Link this Share this Digg this Email Reprints

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