In response to a request filed by Telenor East Invest AS, the Russian Supreme Court today delivered to Telenor an order that will help restore corporate governance in VimpelCom, the Russian mobile operator in which Telenor owns 26.6 percent of the voting shares.
The order provided to Telenor states that Russia’s highest court has stayed enforcement of a lower court decision that, if upheld, would have suspended the super-majority voting provisions in VimpelCom’s charter applicable to decisions of VimpelCom’s board of directors on strategic issues, including acquisitions. The order also says that Supreme Court will now take jurisdiction of the case.
“We are pleased that Russia’s highest court has assumed responsibility for this matter and look forward to a final resolution which will reaffirm the legality of VimpelCom’s charter,” said Telenor spoksman Dag Melgaard. “We believe the Supreme Court’s decision today confirms our view that there were gross violations of law in the lower court rulings.”
Telenor filed a petition with the Supreme Court on February 10, 2005 requesting review of a January judgment by a Krasnodar district court that changed the voting threshold by which certain strategic decisions, including acquisitions, are made, from a super-majority to a simple majority.
The judgment resulted from a suit filed by a shareholder residing in rural Temruk in the Krasnodar region who acquired two shares of common stock in VimpelCom two days before the legal action. The plaintiff, Victor Makarenko, also requested in a separate lawsuit against VimpelCom that the Krasnodar Arbitration Court acknowledge the validity of a proposed acquisition by VimpelCom of the number-four Ukrainian cellular operator, Ukrainian Radio Systems (trade-named WellCom).
Telenor’s petition to the Supreme Court stated, among other things, that there had been gross violations of elementary legal procedures in the case, including that the Temruk district court had no jurisdiction whatever in the matter.
“We are encouraged by the Supreme Court’s decision, which indicates that the Russian judicial system ultimately can be relied upon to restore legal order in commercial conflicts,” said Mr. Melgaard. “We shall continue to put our faith in the system. Telenor is determined to continue to offer our unique emerging markets expertise to Russia’s telecommunications industry,” said Mr. Melgaard. “We are dedicated to maximizing shareholder value, providing top quaility service to customers, and delivering the maximum benefit to Russian society at large.”