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. Last Updated: 07/27/2016

VimpelCom Dispute With Telenor Deepens

HELSINKI -- Telenor, which owns part of VimpelCom, may reject the Russian phone company's 2006 budget, intensifying the dispute about an expansion into Ukraine.

Oslo-based Telenor, Norway's state-controlled phone company, also wants VimpelCom to disclose information on the relationship of certain VimpelCom directors and a Ukrainian company bought by VimpelCom last month, according to a letter sent by Telenor-nominated board members to VimpelCom chairman David Haines.

VimpelCom last month bought Ukrainian RadioSystems for $231 million to expand outside Russia. The purchase marked a victory for Alfa Telecom, VimpelCom's largest shareholder, over Telenor, which opposed the deal. Alfa has pushed for VimpelCom to expand into Ukraine, where subscriber growth rates are faster than in the company's home market.

"We continue to question the legality of the URS acquisition and reserve all our rights in respect thereof," board members Arve Johansen, Fridtjof Rusten and Henrik Torgersen wrote in the letter. "As you are aware, under VimpelCom's charter, a vote of eight of VimpelCom's nine directors is required to approve the 2006 budget."

VimpelCom's 2006 budget includes a proposal for $500 million of capital expenditures relating to URS and financing for URS by VimpelCom.