BrT Starts Arbitration Process Against TIM Merger Agreements

Brazil's third largest fixed line operator Brasil Telecom (BrT) has started an arbitration process against Italian mobile group TIM regarding merger agreements signed last year, BrT said in a press release.

BrT and Brasil Telecom Celular aim to obtain the annulment of several agreements with TIM Internacional and TIM Brasil about the merger of mobile phone units Brasil GSM and TIM Brasil in April 2005, the statement said.

BrT alleges that the merger agreement and its respective protocol were in violation of the law and a conflict of interest.

The agreement was also in breach of shareholders' agreements and lacking the necessary corporate approvals, according to the statement.

BrT's current management considers that such agreements are contrary to the company's best interests, specifically regarding its mobile telephony business.

TIM declined to make a comment about the proceedings, according to Agência Estado.

The arbitration shall be governed by the rules of the International Chamber of Commerce, BrT said.

After gaining control of BrT last September, US financial giant Citigroup (NYSE: C) has been alleging various cases of mismanagement by the telco's former controller, Opportunity Bank.

BNamericas.com"

Posted to the site on 18th March 2006