Alfa started investing in VimpelCom in summer, 2001. The power-broking between Alfa group and
Telenor in
VimpelCom started 2004, when Alfa proposed that VimpelCom acquire a larger share in
Ukrainian RadioSystems (URS), a small GSM operator in
Ukraine operating under the brand
«WellCom». Telenor found the price of US$132 million far too high, after the Russian telco
Golden Telecom had declined acquiring URS at a far lower price. In October 2004, a minor shareholder of VimpelCom lodged three lawsuits against Telenor in the provincial city of
Krasnoyarsk in
Siberia, with claims that the VimpelCom shareholder agreement be cancelled, and the URS shares be acquired. In May 2005, the Alfa Group filed a lawsuit against Telenor, via Alfa's daughter company
Eco Telecom Ltd, contesting the declination of Telenor's three VimpelCom board members to approve the URS acquisition. Eco Telecom especially contested Telenor's vetoing power in the VimpelCom shareholder agreement. After the trial, Alfa Group declined during four years to take part in the board of managers meetings in Ukrainian
Kyivstar, thereby blocking the normal procedures of annual assemblies, approval of accounts, and payments of dividends. In 2008 Telenor achieved several legal approvals in the U.S. Federal Court of Appeal in
New York, and in 2009 the Alfa Group submitted to the rulings and took up normal shareholder activity in Kyivstar. In Russian VimpelCom, however, the Alfa Group geared up its legal battle with Telenor by nominating more directors than Alfa's capital share implied. In January 2007, a court of appeal in
Geneva,
Switzerland ruled that Alfa Group had violated the shareholder agreement of VimpelCom. In November 2005, VimpelCom acquired 100% of URS, after having got approval from VimpelComs annual assembly. Thereby, the Alfa Group owns shares in both URS (
Beeline Ukraina) via VimpelCom, and in
Golden Telecom which operates in both Russia and Ukraine, and in Ukraine's major mobile operator
Kyivstar GSM, and in
Turkish Turkcell which owns a stake in the Ukrainian mobile operator
Astelit. Telenor and Alfa disagree over the latter's ownership in three of Kyivstar's competitors in the Ukrainian market. In 2004, Alfa Group's daughter company «Storm» filed a number of lawsuits against Telenor, to nullify a number of provisions in the Kyivstar charter and shareholder agreement. Alfa Group especially wanted to nullify an arbitration case that Telenor had lodged in
New York, but was rejected. Alfa reacted to their legal loss by boycotting all normal shareholder activity in Kyivstar, for four years from 2004, effectively blocking the business of annual assemblies, and avoiding the consolidation and ratification of Kyivstar's annual accounts. Alfa Group was convicted to daily penalties of US$100,000 from 12 March, and a further 100,000 daily if not either Alfa's shares in Kyivstar be sold, or ownership in competing business be reduced to a maximum 5%. NeOn 28 April 2009, the New York court ruled that Alfa Group had submitted to the legal rulings. Judge
Gerard E. Lynch established that Alfa Group had reduced their ownership in competing mobile operations in Ukraine.
Farimex vs. Telenor In 2009 a small, Russian-owned company,
Farimex Ltd, wholly owned by a
Dimitrij Fridman, lodged a claim of US$5.7 bn from Telenor in compensation for Telenor's refusal to approve VimpelCom's acquisition of URS and market entry in Ukraine. Courts in
Khanty-Mansiysk and
Omsk have approved Farimex' claims and arrested Telenor's US$1,8 bn worth shares in VimpelCom in March 2009, but Telenor refuses to accept the legal premises and appeals the verdicts to the regional court of
Tyumen, which is the last court of appeal before the federal level in
Moscow. Telenor Executive vice president
Jan Edvard Thygesen has repeatedly said that a swap of shares in VimpelCom and Kyivstar between Telenor and Alfa Group is an option, but hard to achieve in practice. When Minister of Foreign Affairs
Jonas Gahr Støre visited his Russian counterpart
Sergej Lavrov in Moscow on 24 March 2009, the strife between Alfa and Telenor was elevated to become the prime issue. Still, Telenor was presented by a claim from the Russian bailiff of US$1.7 bn, on 3 April, via a Norwegian district bailiff. Three days later, Telenor asked the federal arbitration court in Moscow to sustain this action until the Tyumen court had negotiated the substantial issue. The case between Farimex and Telenor has aroused widespread, international concern. Roland Nash, Chief of research at
Renaissance Capital viewed the case as a test to the credibility of Russia's legal system and openness to foreign investment. Russia analyst
Christopher Granville views the Farimex vs. Telenor case as even more serious to Russia's credibility than earlier legal battles. And judge Gerard E. Lynch, presiding in the New York appeal cases lodged by Telenor over Kyivstar, has criticized Alfa Group's utilisation of remote courts in Western Siberia.
Agreement In early October 2009, it became evident that Altimo (Alfa) and Telenor had for some time conducted negotiations for a solution to their conflicts. On 5 October, it was communicated that written agreement had been reached, to establish a joint holding company for VimpelCom and Kyivstar, named
VimpelCom Ltd. The agreement says that the two main owners establish VimpelCom Ltd in
Amsterdam and list it at the
New York Stock Exchange. The holding company, and thereby VimpelCom and Kyivstar, will be owned 38,84% by Telenor and 38,46% by Altimo. The remaining stock capital, minimum 20%, is to remain free floating at any given time. The two main owners will have three board members each, and let the remaining owners appoint another three members of the Board of directors. That board of nine will appoint the holding company's CEO after an independent, international recruitment process. The agreement depends on all legal disputed concerning VimpelCom and Kyivstar to vanish, and it depends on the Russian Federation to allow Telenor to increase its ownership in VimpelCom. ==Dispute with TeliaSonera==