Kyivstar Shareholders Meeting

Yesterday representatives of Storm, which owns a minority 43.3 percent stake in Kyivstar and is a wholly owned subsidiary of Alfa Telecom Group, once again failed to attend a scheduled Kyivstar shareholders meeting. The failure by Storm to attend the Kyivstar shareholders meeting, and of Storm-nominated board members to attend the company's board meetings, are yet another violation of the shareholders agreement that Storm, and its owner Alfa, negotiated and agreed to, mandating that attendance. Ukrainian law requires 60 percent shareholder attendance for a meeting to reach quorum. Telenor has already taken this matter up through arbitration in New York courts, per the shareholder agreement signed by Storm, which explicitly states that all disputes are to be settled in New York under UNCITRAL rules.

Telenor spokesperson Dag Melgaard today said, "These tactics are all part of an illegal and unethical campaign by Alfa to block Telenor, and the further development of the companies we have jointly invested in both in Ukraine and Russia. Unlike Alfa, which is merely a financial investor, Telenor is a long-term investor with the industrial experience and expertise to continue to develop Kyivstar and VimpelCom as leading, professional telecoms in line with global best practices. Telenor will vigorously defend itself against this and other attacks."

Reported Ukrainian Supreme Court Ruling

Telenor on Sunday, February 26 received from a journalist an unofficial copy of a decision apparently made by the Ukraine Supreme Court regarding Kyivstar. The Court, however, turned town Telenor's request on for a copy of the decision. Even if this is, indeed, the final decision of the Ukrainian Supreme Court, Telenor remains the owner of 56.5 percent of all outstanding shares and therefore the controlling shareholder of Kyivstar. The alleged Court ruling would merely require technical changes in the make-up of the Board so that the Board has a majority of Telenor directors who are also shareholders of Kyivstar. These changes are expressly required by the shareholders agreement between Telenor and Storm, which is wholly owned by Alfa. If required by the Court, these changes could only be implemented if and when representatives of Storm recommit to attending the company's shareholder and board meetings, which they have failed to do over the course of the last year at least.

This decision would also have no impact on the fact that Storm's violations of the shareholders agreement must be decided in the U.S. in New York City in an arbitration proceeding filed on Feb 8 by Telenor - arbitration that Storm expressly agreed to in the shareholders agreement it signed January 30, 2004 after Alfa became 100 percent owner of the Kyivstar share. Storm's filing of cases in Ukraine is in direct and blatant violation of that compulsory arbitration clause and Telenor will hold Storm accountable for that violation of the shareholder agreement as well.

For more information or inquiries to Telenor, please do not hesitate to
contact Dag Melgaard, Vice President Corporate Communications, Telenor ASA, tel: (+47) 901 92 000. Email: Dag.Melgaard @ Telenor.com or Sam VanDerlip or Elena Shouliveystrova, The PBN Company Moscow, tel: (+7495) 775 0077. E-mail: sam.vanderlip @ pbnco.com or elena.shouliveystrova @ pbn.ru