Telenor CFO: Alfa Group Fails To Pay For Arbitration In US

STOCKHOLM -(Dow Jones)- A U.S. arbitration ruling relating to alleged violations by Russia's Alfa Group of a shareholder's agreement in Kyivstar is delayed as Alfa Group hasn't paid their bill, said Telenor's Chief Financial Officer Trond Westlie at a press conference Tuesday.

Kyivstar is Telenor's highly profitable unit.

Westlie said the ruling is ready. Asked if Telenor would consider paying Alfa Group's invoice, he said: "We have started that process."

As part of its arbitration claim, Telenor has sought an arbitration award that will make Alfa Group and their affiliates comply with the terms of the shareholders agreement in Ukrainian mobile telecom operator Kyivstar.

Among other things, this would require Alfa Group and its nominees on the Kyivstar board to attend future shareholder and board meetings, and also cease the commencement or further pursuit of all court actions in Ukraine.

In March this year Telenor was forced to exclude Kyivstar from its accounts after affiliates Alfa Group commenced legal actions in Ukrainian courts disputing Kyivstar's authority to appoint auditors.

These actions have led to injunctions to prohibit Kyivstar's management from providing financial information to Kyivstar's international auditors and shareholders, including Telenor.

Telenor is the majority owner of Kyivstar, holding 56.5% of the shares, while Alfa Group holds a 43.5% stake.

-By Magnus Hansson, Dow Jones Newswires;+46 8 545 130 91, magnus.hansson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 24th July 2007