In a development condemned by officials of Telenor as “outrageous,” Russian bailiffs said Monday that they had prepared documents to auction Telenor’s stake in Russian mobile phone carrier Vimpelcom to enforce a US $1.72 billion damage award ordered earlier this year by a Siberian court in a long-running legal dispute pitting Telenor against the Alfa Group. Alfa and Telenor hold respective stakes of 44% and 29.9% in Vimpelcom, the second largest wireless firm in Russia. The dispute, which centers upon Vimpelcom’s 2005 takeover of Ukrainian RadioSystems (URS), is related to a second lawsuit that concerns Alfa’s and Telenor’s respective holdings in Kyivstar, a Ukrainian wireless operator and competitor of URS. Fairmex, a minor Vimpelcom shareholder, has accused Telenor of attempting to block the purchase of URS by subsidiaries owned by Alfa and has pursued claims against Telenor in the Russian court system. Although courts in the U.S. have held subsidiaries of Alfa in contempt for their failure to adhere to a 2007 arbitration order, Russian courts have ruled overwhelmingly in favor of Fairmex. Telenor’s shares in Vimpelcom were frozen last March by a Siberian court after the company refused to pay court-ordered damages of $1.72 billion. (Telenor, which has appealed the decisions of the Siberian court, has argued that it should not be forced to pay damages while its appeal remains pending.) In a statement issued Monday, Russia’s federal bailiff indicated that Telenor’s shares “will be transferred in the near future for sale at auction.” Expressing confidence that “the incorrect decision of the [Siberian] court will eventually be overturned,” a Telenor executive declared, “it would therefore be outrageous if the bailiff’s office should go ahead with a sale now.”
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Telenor shares in Vimpelcom to be auctioned
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