23 Jun 2009 16:13

Shchegolev: state won

MOSCOW. June 23 (Interfax) - The Russian state will not interfere in the conflict between Norwegian Telenor and Alfa Group over VimpelCom , the head of the Telecommunications and Mass Communications Ministry said.

The statement seconds comments from Prime Minister Vladimir Putin and other Russian government officials concerning the conflict, which could see Telenor lose 26.6% of shares in VimpelCom, one of Russia's "big three" mobile operators.

Russian executive authorities have no leverage over the judicial system, Telecommunications and Mass Communications Minister Igor Shchegolev said at a meeting of the Association of European Banks in Moscow on Tuesday.

"This is a conflict between two market participants, one of which has serious state support [the state owns a large stake in Telenor]," Shchegolev said. The Russian state, which owns no shares in VimpelCom, views the situation as a business dispute "that could and should be resolved in the courts," he said.

Russian court bailiffs are preparing to sell 26.6% of shares in VimpelCom owned by Telenor but currently frozen in order to secure a $1.7-billion judgment in favor of VimpelCom. In late February the Eighth Appellate Court in Omsk ordered Telenor to pay $1.728 billion to VimpelCom to compensate the Russian mobile operator's losses due to delays in acquiring Ukrainian Radio Systems.

The suit was brought by a company called Farimex, the owner of a 0.002% stake in VimpelCom. Telenor believes Farimex is acting on behalf of Alfa, which has a 44% stake in VimpelCom. Telenor and Alfa, which also share ownership of Ukrainian mobile operator Kyivstar, have been at odds for some time. Market watchers see the Farimex suit as an effort to pressure Telenor.

The conflict stems from the fact Telenor bought stakes in two companies that compete with each other, Shchegolev said.

Telenor, the controlling shareholder in Kyivstar, tried to block VimpelCom's movement into Ukraine, which Alfa Group had promoted.

Shchegolev said restrictions should be imposed on ownership of stakes in competing companies. A strategic investor should only be able to invest in one company per market, with any other stakes being held as portfolio investments. Russia currently has no such restrictions, but they would a good thing in terms of both foreign and domestic investors.

Shchegolev previously said that his ministry is discussing restrictions on foreign ownership of Russian assets. "If we could tell [foreign investors] that they can participate [in Russian telecoms] but only as a non-strategic partner, that would do a lot to prevent these kinds of conflicts from arising," Shchegolev told Vedomosti concerning the Telenor/Alfa conflict.

"We are discussing the issue [of how that can be implemented] with legal advisers, we are analyzing the experience in other countries. The legislation could include a provision that a company acquiring a stake of a certain size would be able to receive dividends but wouldn't be able to influence the strategic course," he said.