IBRC Russian partner faced legal accusations

Fri, Nov 9, 2012, 00:00

Alfa Group, the Russian conglomerate selected by the Irish Bank Resolution Corporation to seize valuable assets formerly owned by the Quinns, has itself been accused in the past of using tactics similar to those alleged against the family.

The accusations stem from Alfa’s relationship with Telenor, the State-owned Norwegian telecoms group, which is a major shareholder in Vimpelcom, whose shares are traded on the New York Stock Exchange.

Alfa, with which IBRC is to agree to share the proceeds of any Quinn assets recovered, is also a significant shareholder in Vimpelcom. Telenor has accused Alfa of trying to steal its shares through illegal means and by using the Russian courts.

In 2005, a man called Victor Makarenko bought two Vimpelcom shares and began a legal action in a rural Russian court to alter the rules for how Vimpelcom made board decisions. At the time Alfa and Telenor were locked in a dispute over Vimpelcom’s expansion into Ukraine.

In 2008, a British Virgin Islands company called Farimex Products brought a $3.8 billion lawsuit in a Siberian court against Telenor.

The Norwegians claimed Farimex was controlled by Alfa.

“Farimex is controlled by Alfa and its claim is just another one of Alfa’s collusive lawsuits,” Telenor spokesman Dag Melgaard said at the time. “Farimex’s only director is Dmitry Fridman, Mikhail Fridman’s first cousin.”

Mikhail Fridman is considered one of Russia’s richest oligarchs and is one of the main shareholders in the Alfa Group.

In 2009, a court in New York held four Alfa Group companies to be in contempt and imposed a daily fine of $100,000 until the contempt was purged. The fine was to increase to $300,000 a day after 30 days and to $400,000 a day 30 days after that.

Within hours, a Russian bailiff working with Farimex arrested Telenor’s shares in Vimpelcom by serving an order on a Moscow share registry. Senior Telenor executive Jan Edvard Thygesen said the dispute involved “illegal acts, supported by the Russian courts”, that threatened Telenor’s shareholders.

Telenor and Alfa are still shareholders in Vimpelcom.

IBRC’s decision to partner Alfa was approved by Minister for Finance Michael Noonan.