"We believe the court is mistaken on both substantive and procedural issues, and Telenor will appeal," said Telenor Executive Vice President and Head of Eastern/Central Europe, Jan Edvard Thygesen. "The violations of Russian law and VimpelCom's charter that occurred in relation to VimpelCom's 14 September 2005 EGM are sufficiently egregious that the decision of the EGM should be invalidated."

Following a hearing today, the Moscow Arbitration Court dismissed all of Telenor’s motions and then dismissed the case. The judge said the full written decision would be issued on May 29. Telenor will then have 30 days to appeal.

"We believe the appellate court will determine that the EGM was convened in violation of law and with disregard for the rights of shareholders," said Thygesen.

"The URS acquisition was actively promoted by Alfa Group. It has now been shown to be a waste of company assets, completed outside the financial and Board controls of the company," said Thygesen. "Telenor supports the sale of Kyivstar to VimpelCom, on the condition that a market based separation mechanism is in place, and believes that VimpelCom should focus on this opportunity for expansion in Ukraine."

Telenor, which owns 56.6% of Ukrainian mobile operator Kyivstar, has accepted VimpelCom’s proposal to acquire Kyivstar, on the condition that Alfa, the other large shareholder in VimpelCom, agrees to a market based separation mechanism. If triggered, such a mechanism would allow Telenor or Alfa to purchase the other's interest in VimpelCom.