Russian Court Cancels Transferring 20% Stake in SMARTS to Sigma

MOSCOW, Nov 2 (Prime-Tass) -- Russia's Arbitration Court for the Northwest Federal District has canceled an earlier court ruling to transfer rights to a 20% minus one share stake in Russian regional mobile operator SMARTS to Sigma investment group, SMARTS' press office said Thursday.

The court ruled that the case should be considered once again by the St. Petersburg and Leningrad Region Arbitration Court.

On May 22, the St. Petersburg and Leningrad Region Arbitration Court ruled that Sigma had the rights to the 20% stake in SMARTS. In August, the 13th Arbitration Court of Appeals left the ruling unchanged, rejecting SMARTS' appeal.

According to Sigma, Cyprus-based firm Marshall Telecom Investments, indirectly controlled by SMARTS' Chairman Gennady Kiryushin, bought the 20% minus one share stake from minority shareholders in August 2005 for U.S. $44.1 million. SMARTS, which is registered as a closed joint stock company, failed to notify Sigma of stakes being offered for sale. Under Russian corporate law, a stake in a closed joint stock company can only be sold to an outsider if other shareholders refuse to buy it, said Sigma, which controlled a 0.125% stake in SMARTS.

Meanwhile, SMARTS said in a statement Tuesday that the Arbitration Court for the Samara Region ruled that Sigma bought the 0.125% stake in SMARTS illegally.

SMARTS, or Middle-Volga Interregional Association of Radio and Telecommunication Systems, operates a GSM 900/1800 standard network in 16 regions of Russia.

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Posted to the site on 2nd November 2006