Telenor Updates on Kyivstar

Telenor strongly opposes a ruling by the High Commercial Court in Ukraine

January 24, 2006

2 Min Read

OSLO, Norway -- Telenor strongly opposes a ruling by the High Commercial Court in Ukraine, which questions the validity of parts of the shareholder agreement between Storm and Telenor and the Charter of Kyivstar. The ruling has been appealed to the Supreme Court in Ukraine and will not affect Telenor's consolidation of Kyivstar.

The High Commercial Court has in its ruling challenged the way the Board of Directors is nominated and elected as well as procedures for appointing CEO of the company. Today the Board of Kyivstar consists of nine members, of which five are nominated by Telenor and four by Storm. The CEO will according to the Charter be nominated by Telenor. The High Commercial Court calls upon a renegotiation of these points in the Charter.

"Telenor believes that there is no discrepancy between requirements in Ukrainian law and the way the board composition and voting requirements are structured in the present charter. Two court instances have previously ruled in favour of Telenor, and we will keep defending this position before the Supreme Court," says Jan Edvard Thygesen, Executive Vice President of Telenor.

"We do not believe the present court interpretation will prevail. However, if so, it is important to note that it only requires the parties (Storm and Telenor) to make adjustments to the charter to make it compliant with the law as interpreted by the court. The changes required are only technical. It is obvious that a shareholder must be represented with a voting power that reflects the actual shareholding. The present board representation and voting requirements reflects the current shareholding, as Telenor holds a majority of the shares (56,5%)," says Mr.Thygesen.

"Based on the foregoing, speculations that Telenor's ability to consolidate Kyivstar is lost as a consequence of the present ruling and that Storm and Telenor now is on equal footing, is grossly exaggerated and wrong in our view, and has no foundation in the ruling by the High Commercial Court of Ukraine," concludes Mr. Thygesen.

Telenor Group (Nasdaq: TELN)

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