BVI company files a suit against Russia’s mobile operator MTS

On April 28, Nomihold Securities Inc., registered in the British Virgin Islands, filed a suit at the London arbitration court against Russia’s MTS. By the information provided by the Russian mobile operator, Nomihold Securities accuses MTS of failing to exercise a $170 million stock repurchase option. The court proceeding date to examine the case will be known in summer of this year.

In 2005, the BVI company sold 51% of the shares of Tarino Limited, which is the indirect owner of the Kyrgyz GSM operator Bitel, to MTS for $150 million. The deal was concluded by MTS through its Luxembourg-registered subsidiary, Mobile TeleSystems Finance S.A. Soon the Russian investment company, Reservspetsmet, said it had struck a deal to purchase Bitel and since that time MTS has had no operational control of the Kyrgyz operator.

In its suit against MTS, BVI-registered Nomihold Securities Inc. demands from MTS Finance S.A. to exercise the $170 million option for the repurchase of 49% of the shares of Tarino Limited, and compensate for the plaintiff’s losses and expenses.

In its turn, MTS considers that it must not exercise this option because it does not possess the shares acquired in 2005. The Russian company also intended to ask for the review of the option terms because it was set at the time the option deal was struck that Tarino Ltd. had operational control of Bitel, which is the Kyrgyz’s sole company operating on the GSM. However, in its official statement MTS said that it will pay the required amount, if the court makes such a judgement.

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