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Today's paper. Last Updated: 02/09/2012

Telenor Blames Farimex for Ukrainian Antitrust Probe

Bloomberg
Telenor said Monday that Farimex Products is behind a probe started by Ukraine's Anti-Monopoly Committee into Telenor and Kyivstar, Ukraine's biggest mobile-phone company.

Farimex claims that Telenor, Kyivstar, which is partly owned by Telenor, and Storm, a unit of Alfa Group and also a Kyivstar owner, breached competition law by including a nonparticipation clause in Kyivstar's shareholder agreement, Telenor said. Farimex also claims that Telenor hindered competition by delaying VimpelCom's purchase of Ukrainian Radio Systems, it said.

"Telenor is a strong defender of competition and believes that the Anti-Monopoly Committee of Ukraine has been sadly misled by Farimex," said Jan Edvard Thygesen, head of Telenor's operations in Central and Eastern Europe.

Farimex, which holds 0.002 percent in 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, 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.

"Nonparticipation 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 nontransparent acquisition," he said.


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