Telenor Update: Financial Times regrets lacking support from Russian officials

Jan Edvard Thygesen, Executive Vice President and Head of Telenor’s Central and East European operations.

One of the world’s most important agenda-setting columns on business and financial topics, The Lex Column in Financial Times, is commenting on the political aspect of the critical dispute between Telenor and Altimo.

The Lex column with the heading ‘Bear-faced cheek’ observes the political aspect of the critical situation in Russia. The comment starts off by mentioning the situation of foreign investors in Russia: ‘Just when foreign investors thought it was safe to paddle in Russian waters, up looms another shark fin.’

Telenor with a gun to its head

After describing the situation between the two companies, the column describes the curious situation in Russia: “Telenor has won US rulings against Altimo. But in the meantime, a mystery Vimpelcom shareholder, Farimex, challenged Telenor in Siberia. Last month, an Omsk court backed Farimex, ordering Telenor to pay $1.7bn damages to Vimpelcom – roughly the value of its Vimpelcom stake. Farimex, a British Virgin Islands-registered holder of 0.002 per cent of Vimpelcom, has enjoyed surprising legal success. Telenor thinks Farimex is a front for Altimo. Altimo vigorously denies this.”

Bailiffs this month seized Telenor’s Vimpelcom stake and Telenor lost an initial bid for a stay of the Siberian ruling. Unless Telenor pays, bailiffs can sell the stake. The most likely resolution remains a ”divorce”, with Telenor and Altimo swapping assets. But Telenor must now negotiate with, in effect, a gun to its head.’

‘Regrettable’ achievement from the Russian state

The Lex column clearly states its frustration over Russian authorities: “The dispute is almost certainly not state sponsored. Yet Russian officials have declined to support Telenor, even after Norway’s foreign minister lobbied his Russian counterpart. That is regrettable. Russia needs investment more than ever. President Dmitry Medvedev also pledged to reform the legal lottery of the courts system. Time to deliver.”

The article is printed in the Financial Times on March 26 2009. Source: Telenor.