Nordic operator Telenor is to appeal a ruling by a Siberian court to pay damages of US$2.8 billion to Russia’s VimpelCom. At the weekend the court ruled in favour of a minority shareholder in VimpelCom – British Virgin Islands-based Farimex Products – which had complained that Telenor delayed for a year the US$230 million takeover by the Russian mobile group of Ukranian Radio Systems (URS), a small Ukranian mobile operator. Telenor holds a 29.9 percent stake in VimpelCom, Russia’s second-largest mobile operator. The court stated that the damages should be paid to VimpelCom. Although named as a third party in Farimex’s complaint, VimpelCom did not participate in the case.
In a statement, Telenor said it “strongly believes the claimant Farimex is affiliated with the Alfa Group and that the case has no merit. Telenor is confident it will prevail in reversing the decision on appeal.” Telenor added that it initially opposed VimpelCom’s acquisition of URS because it was “vastly overpriced and made no business sense.” The Nordic company claims that the sellers of URS have never been identified and the operator has been unprofitable ever since VimpelCom acquired it in November 2005, reportedly losing US$4.1 million in 2005, US$61 million in 2006 and US$59.6 million in 2007.