June 24, 2008

Telenor Takes Action to Stop Farimex’s Russian Lawsuit

Telenor, a Norwegian telecommunications company, has requested the US Federal District Court in New York to stop Farimex from pursuing a lawsuit against Telenor in Khanty-Mansiysk in Russia.

Earlier, Telenor filed a lawsuit against Alfa Group affiliates Farimex Products, Altimo Holdings & Investments and Eco Telecom, requesting the court to compel Farimex to arbitrate its claim in an arbitration proceeding commenced by Eco Telecom in March 2008.

Farimex filed a $3.8 billion claim against Telenor in a remote court in Siberia less than one month after Eco Telecom started a $1 billion arbitration proceeding in Geneva, Switzerland under the VimpelCom shareholders agreement.

The Eco Telecom arbitration claim is essentially identical to the claim filed by Farimex. Both Farimex and Eco Telecom allege that Telenor's nominees on VimpelCom's board delayed VimpelCom's acquisition of loss-making Ukrainian mobile operator Ukrainian Radio System and thereby harmed VimpelCom.

In addition to naming Telenor as a defendant, Farimex also named Eco Telecom, Altimo and other Alfa Group entities as defendants. Telenor believes this was done in order to link the case to Khanty-Mansiysk where one of the Alfa Group parties has its registered office and to create an appearance of independence on the part of Farimex.

Dag Melgaard, vice president of Telenor Group Communications, said: "Farimex is controlled by Alfa, and its claim is just another one of Alfa's collusive lawsuits. Farimex's only director is Dmitry Fridman, Mikhail Fridman's first cousin.

Dmitry Fridman signed the power of attorney that authorized Farimex's lawsuit. The only evidence produced by Farimex for its holding of ADRs in VimpelCom is a letter from Alfa Capital Holdings, and many of the documents that were attached to Farimex's claim can only have come from Alfa or VimpelCom."