Telenor says Farimex behind Ukraine antitrust probe

14:44, 18 May 2009
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Farimex claims Telenor breached competition law

Telenor ASA said Farimex Products Inc. is behind a probe started by the Anti-Monopoly Committee of Ukraine against Telenor and ZAT Kyivstar GSM, Ukraine’s biggest mobile-phone company, Bloomberg reported.

Farimex claims Telenor, Kyivstar, which is partly owned by the Oslo-based company, and Storm, a unit of Russia’s Alfa Group and also a Kyivstar owner, breached competition law by including a so-called non-participation clause in Kyivstar’s shareholder agreement, Telenor said in a statement today. Farimex also claims Telenor hindered competition by delaying OAO VimpelCom’s purchase of Ukrainian Radio Systems, according to the release.

“Telenor is a strong defender of competition and believes that the Anti-Monopoly Committee of Ukraine has been sadly misled by Farimex,” Jan Edvard Thygesen, who heads Telenor’s operations in central and eastern Europe, said in the statement.

Farimex, which holds 0.002 percent in Russia’s VimpelCom, is a front for Alfa Group, Telenor has said. Altimo, Alfa’s telecommunications unit, has denied any link to Farimex. Farimex brought a case against Telenor in Siberia that found the Norwegian company liable for damages for delaying VimpelCom’s expansion in Ukraine, leading to a $1.7 billion fine.

Telenor owns 29.9 percent of VimpelCom, Russia’s second- largest mobile-phone company, while Alfa Group owns 44 percent. Telenor’s shares in VimpelCom were seized in Moscow in March after Telenor contested the Siberian fine.

Telenor also holds 56.5 percent in Kyivstar, while Alfa Group owns a 43.5 percent stake via Storm.

“Non-participation clauses are normally included in agreements between partners worldwide, so too between the Kyivstar shareholders in the agreement signed in 2004,” Trond Moe, country manager for Telenor Group Ukraine, said in the statement. “Our major reason to go against the acquisition of Ukrainian Radio Systems in 2005 was to prevent VimpelCom from losing money through an overpriced and non-transparent acquisition,” he said.


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