Telenor accuses Russian rival of paying for negative press in Ukraine

15:00, 14 March 2007
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Cynical business practices widespread in Ukraine?

Telenor, the Norwegian phone company, claimed Tuesday that the telecommunications unit of Alfa Group, a Russian conglomerate controlled by the billionaire Mikhail Fridman, had been paying journalists in Ukraine to publish negative articles about Telenor in the midst of a business dispute, according to International Herald Tribune/New York Times.

The Alfa subsidiary, Altimo, denied the accusation in a strongly worded statement, saying that documents Telenor distributed to journalists to support its claim were forgeries.

The documents were also filed as supporting evidence in an arbitration process in New York, as part of a wider legal dispute between the Norwegian and Russian companies.

Telenor`s claim, nonetheless, opened a window on one of the more cynical business practices in the former Soviet Union, and one that is believed to be widespread.

Telenor, the biggest telecommunications company in the Nordic region, and Altimo, a major player in the former Soviet Union, are struggling for control of two large assets - Kyivstar, the largest Ukrainian cellphone operator, and VimpelCom, the second-largest Russian telecom. MTS is the largest.

The companies divided ownership of Kyivstar and VimpelCom in a 2004 partnership that has unraveled into lawsuits in Ukraine, Russia and the United States.

Telenor on Tuesday distributed what it said were internal Altimo planning documents. They appeared to give an unusually fine-grained picture of the budgeting and execution of a publicity campaign based on surreptitious payments to journalists to plant negative articles about a business rival.

The effort, according to Kjell Morton Johnsen, Telenor`s vice president for Central and Eastern Europe, was intended to discredit Telenor in Ukraine.

"The media and institutions in Ukraine are being used by a player in the market for their own gain," Johnsen said by telephone. "It`s insulting to Ukraine that they can be used in this way. We need to get back to business as normal."

Johnsen said Telenor had obtained the documents from a person familiar with Altimo`s business who wished to remain anonymous. Johnsen said the documents were genuine.

One document distributed by Telenor and titled "Logical Rationale for the Information Campaign under the Kyivstar Contract" purported to highlight the strategy.

It notes ruefully that Norwegian companies typically have unimpeachable business reputations, and that any attack on Telenor thus must be preceded by an effort to undermine the image of Norwegian business generally.

"In order to break the existing stereotype whereby Western business and, in particular, Norwegian business, always `plays fair,` an information wave" of negative publicity should be employed, the document said.

It suggested planting "investigative" stories saying Telenor used double standards: that it obeyed Western courts but disrespected Ukrainian law.

The document said such claims of disrespect would resonate with rising nationalism in Ukraine after the 2004 Orange Revolution. "Nationalism must become the starting point," the document said.

A spreadsheet titled "Plan of an Information Campaign to Discredit the Image of Norway in Ukraine" purported to show that Altimo planned to spend $74,950 between Jan. 29 and March 31.

One expenditure of $4,000, according to the spreadsheet, would have gone to plant a story saying Telenor had acquired Kyivstar under favorable terms after it struck a deal with Leonid Kuchma, the unpopular former Ukrainian president.

A separate budget noted payments for stories that had already allegedly appeared.

Money was also noted to rent billboards that appeared in Kiev this winter calling on Norwegian companies to obey Ukrainian law, a thinly veiled campaign targeting Telenor.

Elsa Vidal, a specialist on former Soviet countries at Reporters without Borders, a journalists` group based in Paris, said planted articles were commonplace in the region.

"Almost all companies pay money to newspapers to write about how good their products are," rather than place advertising, she said. "You can find the same articles in two newspapers sometimes."   

This news was monitored by the Action Ukraine Monitoring Service for the Action Ukraine Report (AUR), Morgan Williams, SigmaBleyzer, Editor.

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