Algerian Court Fines VimpelCom Subsidiary $1.3 Billion

An Algerian court has fined Orascom Telecom Algerie (OTA, which operates under the name Djezzy), a subsidiary of Russia’s third largest mobile phone operator VimpelCom, some $1.3 billion, VimpelCom and Orascom Telecom reported.

The judgment relates to a previously disclosed claim brought in 2010 by the Algerian authorities alleging breaches of foreign exchange regulations. It also contains a criminal sentence against a member of OTA’s senior executive team.

OTA is 96.8 percent owned by Orascom Telecom Holdings SAE, which, in turn, is 51.9 percent owned by VimpelCom. OTA plans to lodge an appeal in the hope that doing so will provisionally suspend the judgment.

VimpelCom, which is negotiating the possible sale of its 51 percent stake in Djezzy to the Algerian government, said it “maintains that OTA and OTA’s senior executive have acted in good faith and in compliance with the law.”

In January 2012, VimpelCom and Algeria’s Finance Ministry said they entered into a non-binding Memorandum of Understanding to explore the possible sale.

Last year, VimpelCom acquired Italy’s Wind Telecom in April 2011. OTA was one of Wind’s key assets.


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