From Wikipedia, the free encyclopedia Alfa Group
Alfa Group
Alfa Group Consortium Group had total assets of US$ 59,900 million, total equity
Консорциум "Альфа-Групп" of US$ 21,790 million and profit for the financial year of
Type Private conglomerate US$2,810 million. Return on shareholders’ equity were
Industry Diversified investments recorded at 13.4%.[1]
Founded 1989
Ownership structure and joint
Founder(s) Mikhail Fridman
German Khan ventures
Alexei Kuzmichov
Alfa Group has ownership stakes in the following compa-
Headquarters Moscow, Russia nies and joint ventures:
Area served Russia, Ukraine, Turkey, CIS • Alfa-Banking Group, which includes Alfa-Bank
Russia, wholly owned commercial and investment
Key people Mikhail Fridman
bank and one of Russia’s largest, private banks, Alfa-
German Khan
Alexei Kuzmichov Bank Ukraine, one of the ten largest banks in
Petr Aven Ukraine, banks in the Netherlands (Amsterdam
Trade Bank), Belarus and Kazakhstan as well as
Revenue US$11,934 million (2010)[1]
financial subsidiaries in Cyprus, United Kingdom and
Profit US$2,810 million (2010)[1] the United States.
• AlfaStrakhovanie Group, one of the largest Russian
Total assets US$59,900 million (2010)[1]
insurers with a diversified portfolio of
Total equity US$21,790 million (2010)[1] comprehensive business and retail insurance
products.
Subsidiaries Alfa-Bank
Alfa Capital Management • X5 Retail Group, the largest food retail operator in
Alfa Capital Partners Russia in terms of sales. Operates Pyaterochka, one
AlfaStrakhovanie Group of the largest discount grocery retailers in Russia in
Altimo terms of sales, Perekrestok, which runs a leading
VimpelCom
chain of supermarkets in Russia, Kopeyka, a leading
MegaFon
TNK-BP discount grocery retailer, and Karusel, one of the
X5 Retail Group largest hypermarket chains in Russia. Listed on
A1 Group London Stock Exchange under the symbol FIVE. Alfa
Rosvodokanal Group Group owns 47.86% of the company, 19.85% stake
Website http://www.alfagroup.org belongs to the founders of Pyaterochka.
• TNK-BP, one of the top ten privately-owned oil
Alfa Group Consortium (Russian: Консорциум «Альфа- companies in the world in terms of crude oil
Групп») is one of Russia’s largest privately owned invest- production. The company was formed in 2003 as a
ment groups, with interests in oil and gas, commercial result of the merger of BP’s Russian oil and gas assets
and investment banking, asset management, insurance, and the oil and gas assets of Alfa Group, Access
retail trade, telecommunications, water utilities and spe- Industries and Renova Group (AAR).[2] BP and AAR
cial situation investments. Alfa Group’s portfolio of com- each own 50% of TNK-BP.
panies includes Alfa-Bank, TNK-BP, VimpelCom, Me- • VimpelCom, one of the world’s largest groups of
gaFon, X5 Retail Group, A1 Group, Alfa Capital Manage- integrated telecommunications services operators.
ment, AlfaStrakhovanie Group, and Rosvodokanal Group. Listed on the New York Stock Exchange under the
The group was founded in 1989 as Alfa-Eco by Mikhail sympol VIP. Alfa through Altimo owns 24.998%,
Fridman, one of the most influential business leaders in Norwegian telco Telenor owns 25.007% of shares,
Russia during the Yeltsin presidency and one of the Russ- and 29.626% stake is owned by Weather Investments
ian oligarchs, in partnership with German Khan, Alexei of Sawiris family.
Kuzmichov and several other partners. • MegaFon, one of the three largest mobile operators
Its headquarters are in Moscow. As a holding com- in Russia. Alfa Group through Altimo owns 25.1%
pany, in the financial year ending December 2010 Alfa stake, while Swedish telco TeliaSonera controls 36%
1
From Wikipedia, the free encyclopedia Alfa Group
stake and 31% of shares are controlled by AF US$200 million for Chernegorneft - a mere fifth of its as-
Telecom Holding. sumed value. On 26 November 1999, TNK took over all of
• Turkcell, Turkey’s largest mobile operator. Alfa Chernorogneft for US$172 million.
Group controls 13.22% stake in the company with Letters of protest from prime minister Tony Blair to
Swedish telco TeliaSonera. president Vladimir Putin helped little, the legally BP-
• Rosvodokanal Group, a leading private operator of owned company was forcibly sold to TNK below market
water utilities in Russia and CIS. price. TNK also got approval from the Khanty-Mansijsk
• A1 Group, former Alfa-Eco, wholly owned special arbitration court to take over Chernogorneft’s stakes in
situations investment company. two joint ventures, in spite of protests from venture part-
• Alfa Capital Management, an asset management ners Norex and Oxidental Petroleum. BP fought on for
company, which serves Russian as well as years to retrieve its rightful ownership in Chernogorneft,
international institutional and private clients. and in August, 2001 this got its first legal approval.
There are a number of current disputes regarding Alfa’s In 2000, according to NoreX, TNK started to under-
claimed ownership of various stakes in telecoms compa- mine Yugraneft’s oil transports through the national
nies. semi-monopolistic pipeline system Transneft. On 11
Alfa Group is notably involved in a commercial dis- April and 26 June 2001, TNK again got two legal victories
pute with Norwegian mobile phone company Telenor in the Khanty-Mansijsk arbitration court, first through a
over the control of Russian company Vimpelcom [3] reversal of earlier regulation regarding Chernogorneft’s
stock capital in the joint-venture, and thereafter through
Legal disputes a nullification of the voting powers in 497,142 out of the
600,000 shares held by NoreX. At an extraordinary annual
Over 10 years, Alfa Group has found itself in legal battle assembly of Yugraneft on 28 June, NoreX’ candidate for
with business partners from Canada (NoreX), Great Bri- the CEO position was elected, but the day after TNK’s se-
tain (BP), Sweden (TeliaSonera), Norway (Telenor), curity executive and 20 heavily armed guards appeared
Turkey and Indonesia. Federal Reserve executive Paul at the Yugraneft office with a false annual assembly pro-
Volcker has accused Alfa Group of violation of the UN tocol, installing Mr. A. Berman as CEO of Yugraneft.
sanctions against Iraq during Saddam Hussein’s regime, Norex’ demands for investigation and nullification re-
and for pressure exercised against KPMG during their mained fruitless. Norex brought the case before a U.S.
investigation of a Bermuda registered, Russian telecom Federal court in New York in February, 2002, demanding
company.[4] US$1.5 bn in redemption from TNK and Alfa Group.[6]
The year after, BP and Alfa Group merged all their oil
Dispute with NoreX and BP and gas interests into a 50/50 joint venture, in spite of
BP’s legal and financial losses in the Yugraneft disputes
Alfa Group’s legal disputes with BP date back to 1991, since 1999. The new venture controlled both Sidanko og
when the Canadian oil company Norex represented a TNK from 11 February 2003.[7] The merger implied that
newly formed, Russian-Canadian joint venture in NoreX’ stake of 97% in Yugraneft come under control of
Siberia’s oil industry, operating the marginal Chernogor Alfa Group and BP. NoreX, thereby, saw their possessions
oil-fields close to Khanty-Mansijsk. With the Russian dwindle and transferred partly to BP,[8] and appealed for
company Chernogorneft, the Canadian company entered copies of BP documents before a US court.[9] In 2004 the
into a 60% ownership in the joint-venture Yugraneft. U.S. Supreme Court sustained Norex’ right to appeal, but
Later on, NoreX increased their stake to 97,64%, and in at a lower level the legal dispute went on for years, with
September 1998 Chernogorneft was filed with bankrupt- only gradual victories for NoreX.[10]
cy by the Tyumen Oil Company (TNK). The arbitration For a summary of the battle of control over TNK,BP, see:
court of Khanty-Mansinsk proclaimed for Chernegorneft TNK-BP.
a new chief executive officer, with a background from Al-
fa Group.[5] The main owner of Chernogorneft was Bri-
tish Petroleum (BP), via their holding company Sidanko. Dispute with Telenor
TNK gained control over 60% of Chernogorneft’s Alfa started investing in VimpelCom in summer, 2001.[11]
debts, and the debt of US$35 million held by EBRD was The power-broking between Alfa group and Telenor in
reduced to US$9 million by Khanty-Mansijsk arbitration VimpelCom started 2004, when Alfa proposed that Vim-
court on 30 July 1999. Thereby, TNK controlled 60% of the pelCom acquire a larger share in Ukrainian RadioSystems
debt claims, and according to NoreX the Alfa Group took (URS), a small GSM operator in Ukraine operating under
over Chernogorneft’s oil sales below market prices.[5] Re- the brand «WellCom». Telenor found the price of US$132
sulting in a forced sell-out of the company, Sidanko (BP) million far too high, after the Russian telco Golden Tele-
was rejected from taking part in auctions, and remaining com had declined acquiring URS at a far lower price.[12]
bidders were legally restrained from offering more than In October, 2004, a minor shareholder of VimpelCom
2
From Wikipedia, the free encyclopedia Alfa Group
lodged three law-suits against Telenor in the provinsial a maximum 5%. NeOn 28 April 2009, the New York court
city of Krasnodar in Siberia, with claims that the Vim- ruled that Alfa Group had submitted to the legal rulings.
pelCom shareholder agreement be cancelled, and the Judge Gerard E. Lynch established that Alfa Group had re-
URS shares be acquired. duced their ownership in competing mobile operations
In May, 2005, the Alfa Group filed a law-suit against in Ukraine.
Telenor, via Alfa’s daughter company Eco Telecom Ltd,
contesting the declination of Telenor’s three VimpelCom Farimex vs. Telenor
board members to approve the URS acquisition. Eco Tele- In 2009 a small, Russian-owned company, Farimex Ltd,
com especially contested Telenor’s vetoing power in the wholly owved by a Dimitrij Fridman, lodged a claim of
VimpelCom shareholder agreement.[13] After the trial, US$5.7 bn from Telenor in compensations for Telenor’s
Alfa Group declined during four years to take part in refusal to approvet VimpelCom’s acquisition of URS and
the board of managers meetings in Ukrainian Kyivstar, market entry in Ukraine. Courts in Khanty-Mansiysk[16]
thereby blocking the normal procedures of annual as- and Omsk have approved Farimex’ claims and arrested
semblies, approval of accounts, and payments of divi- Telenor’s US$1,8 bn worth shares in VimpelCom in
dends. In 2008 Telenor achieved several legal approvals March, 2009,[17] but Telenor refuses to accept the legal
in the U.S. Federal Court of Appeal in New York, and in premises and appeals the verdicts to the regional court of
2009 the Alfa Group submitted to the rulings and took up Tyumen, which is the last court of appeal before the fed-
normal shareholder activity in Kyivstar. In Russian Vim- eral level in Moscow.[18]
pelCom, however, the Alfa Group geared up its legal bat- Telenor Executive vice president Jan Edvard Thyge-
tle with Telenor by nominating more directors than Al- sen has repeatedly said that a swap of shares in Vim-
fa’s capital share implied. In January, 2007, a court of ap- pelCom and Kyivstar between Telenor and Alfa Group is
peal in Geneva, Switzerland ruled that Alfa Group had vi- an option, but hard to achieve in practice.[19]
olated the shareholder agreement of VimpelCom. When Minister of foreign affairs Jonas Gahr Støre vis-
In November 2005, VimpelCom acquired 100% of URS, ited his Russian colleague Sergej Lavrov in Moscow on 24
after having got approval from VimpelComs annual as- March 2009, the strife between Alfa and Telenor was el-
sembly. Thereby, the Alfa Group owns shares in both evated to become the prime issue.[20] Still, Telenor was
URS (Beeline Ukraina) via VimpelCom, and in Golden Tele- presented by a claim from the Russian bailiff of US$1.7
com which operates in both Russia and Ukraine, and in bn, on 3 April, via a Norwegian district bailiff. Three days
Ukraine’s major mobile operator Kyivstar GSM, and in later, Telenor asked the federal arbitration court in
Turkish Turkcell which owns a stake in the Ukrainian Moscow to sustain this action until the Tyumen court has
mobile operator Astelit. Telenor and Alfa disagree over negotiated the substantial issue.
the latter’s ownership in three of Kyivstar’s competitors The case between Farimex and Telenor has aroused
in the Ukrainian market.[14] widespread, international concern. Roland Nash, Chief of
In 2004, Alfa Group’s daughter company «Storm» research at Renaissance Capital viewed the case as a test
filed a number of law-suits against Telenor, to nullify a to the creditibily of Russia’s legal system and opennes
number of provisions in the Kyivstar charter and share- to foreign investment.[21] Russia analyst Christopher
holder agreement. Alfa Group especially wanted to nul- Granville views the Farimex vs. Telenor case as even
lify an arbitration case that Telenor had lodged in New more serious to Russias credibility than earlier legal bat-
York, but was rejected. Alfa reacted to their legal loss tles.[22] And judge Gerard E. Lynch, presiding in the New
by boycotting all normal shareholder activity in Kyivstar, York appeal cases lodged by Telenor over Kyivstar, has
for four years from 2004, effectively blocking the busi- critizised Alfa Group’s utilisation of remote courts in
ness of annual assemblies, and avoiding the consolida- Western Siberia.[23]
tion and ratification of Kyivstar’s annual accounts.[12] No
dividends were paid after 2003. In February, 2006, Te- Agreement
lenor took the issue to a U.S Federal court in New
In early October 2009, it became evident that Altimo (Al-
York.On 16 December 2008, Alfa Group resumed normal
fa) and Telenor had for some time conducted negotia-
shareholder activities, joined in the election of a new
tions for a solution to their conflicts. On 5 OCtober, it
board of directors, and agreed to pay accumulated div-
was communicated that written agreement had been
idends. On 11 March 2009, the Federal district court in
reached, to establish a joint holding company for Vim-
New York ruled for the second time that Alfa companies
pelCom and Kyivstar, named VimpelCom Ltd.[24] The
Altimo, Storm, Alpren and Hardlake had revealed con-
agreement says that the two main owners establish Vim-
tempt for the court by not depositing their Kyivstar
pelCom Ltd in Amsterdam and list it at the New York
shares in the United States.[15] Alfa Group was convicted
Stock Exchange. The holding company, and thereby Vim-
to daily penalties of US$100,000 from 12 March, and a fur-
pelCom and Kyivstar, will be owned 38,84% by Telenor
ther 100,000 daily if not either Alfa’s shares in Kyivstar be
and 38,46% by Altimo. The remaining stock capital, min-
sold, or ownership in competing business be reduced to
3
From Wikipedia, the free encyclopedia Alfa Group
imum 20%, is to remain free floating at any given time.
The two main owners will have three board members
References
each, and let the remaining owners appoint another [1] ^ "Alfa Group Consortium Annual Report 2010"
three members of the Board of directors. That board of (PDF). Alfa Group Consortium. 18 October 2011.
nine will appoint the holding company’s CEO after an http://alfagroup.org/326/reports.aspx. Retrieved
independent, international recruitment process. The 2011-11-13.
agreement depends on all legal disputed concerning [2] "BP, Russian billionaires, and the Kremlin: a Power
VimpelCom and Kyivstar to vanish, and it depends on the Triangle that never was" Oxford Energy Comment,
Russian Federation to allow Telenor to increase its own- November 2011 Accessed 24 November 2011
ership in VimpelCom. [3] Wall Street Journal, Norway seeks caution in
Telenor battle
[4] Telegraph - «BP antagonist has Altimo ambitions»,
Dispute with TeliaSonera 27 June 2008.
Alfa Group and Swedish-Finnish TeliaSonera jointly own [5] ^ NoreX - «History of Conflict».
the Turkish mobile operator Turkcell, and the Russian [6] Norex Petroleum Ltd. v. Access Industries, et al.,
mobile operator MegaFon. No. 02-CV-1499 (LTS)(KNF) (S.D.N.Y.).
In Turkey, TeliaSonera has acquired 47% of the shares [7] Pravda - «Alfa Group, Access/Renova and BP to
in Turkcell Holding, which controlled 51% of Turkcell. create new company», 11. February, 2003.
Telia’s partner was the Turkish company Cukurova. Teli- [8] Moscow Times - «Norex Petroleum Sues For BP’s
aSonera and Cukurova agreed on a binding shareholders’ Dirt on TNK», 13,February 2002, referred at the
agreement in 2005,[25] depriving Cukurova from the right NoreX web page.
to sell Turkcell shares without the prior consent of Teli- [9] Extract of NoreX’ appeal of 18 February 2003.
aSonera, and with the latter company’s right of first pri- [10] U.S. Court of Appeal, New York - extract of rulings
ority to buy eventual shares from Cukurova. However, on NoreX’ right to further appeal and repartiation
Cukurova sold their shares to Alfa Group that same of funds, 21 July 2005.
year.[26] Through this US$3.5 bn purchase, Alfa Group ex- [11] IPR Strategic Business: «VimpelCom shareholders
ercised control of Turkcell’s board of directors already approve Alfa Group investment», 2 August 2001.
from First quarter, 2006.[27] In January, 2007, a court of [12] ^ Telenor - Background on Russia and the Ukraine,
appeal in Geneva, Switzerland, ruled that Cukurova had 2009.
violate the shareholder’s agreement by selling their [13] Forbes Magazine, Bente Bjørndal, «Telenor to fight
shares on to the Alfa Group. The court demanded new Alfa Group lawsuit over Ukraine’s WellCom»,
Cukurova to see to it that the shares be transferred back 24 May 2005.
and re-sold to TeliaSonera. A court of appeal in Vienna, [14] Forbes Magazine, Bente Bjørndal,«Telenor to fight
Austria confirmed this ruling on 7 March 2008, and re- new Alfa Group lawsuit over Ukraine’s WellCom»,
peated the demand to enter into negotiations with Alfa 24 May 2005.
Group over at transfer of the shares, but with no practical [15] Telenor - «Alfa Held in Contempt for Second Time
results. On 7 August 2009 the International Chamber of by US Court; Telenor’s VimpelCom Shares Arrested
Commerce issued an award stating that Cukurova must in Russia», 12 March 2009.
deliver all the remaining shares in Turkcell Holding to [16] Times Online - «Telenor to fight Siberian court
TeliaSonera.[28] order», 18 August 2008.
[17] Norwegian business daily Dagens Næringsliv -
Links to the Icelandic financial «Telenors Vimpelcom-aksjer i arrest», 12 March
2009.
crisis [18] IT Examiner - «Telenor appeals Farimex decision»,
4 March 2009.
Main article: 2008–2011 Icelandic financial crisis
[19] Reuters - «Telenor confident as Alfa bows to U.S.
Alfa Bank has a Luxembourg-registered subsidiary Alfa
court», 18 March 2009.
Finance Holdings. The company’s document trail shows
[20] Aftenposten - «Støre ga klar melding til russerne»,
that Shapburg Limited was a shareholder of Alfa Finance
24 March 2009.
Holdings. Shapburg Limited is an anonymous
[21] St.Petersburg Times - «Investors See Major
Luxembourg-registered company which has been sus-
Implications in Telenor Case», 17 March 2009.
pected of controlling important Icelandic companies.
[22] The New York Times - «Telenor Ruling Stirs Fear of
The finding was reported in 2005.[29]
Court Shopping in Russia», 10 April 2009.
[23] The New York Times - «Telenor Ruling Stirs Fear of
Court Shopping in Russia», 10 April 2009.
4
From Wikipedia, the free encyclopedia Alfa Group
[24] Telenor - «Telenor and Altimo to Create a Leading спасает Исландию". Rususa. 2008-10-21.
Emerging Markets Mobile Operator», 5. oktober http://www.rususa.com/news/news.asp-
2009. The following bases on this joint press nid-37073-catid-8. . An automatic translation:
release. "Discussion of the relationship between Iceland
[25] "TeliaSonera - press release". Cision Wire. and Russia from the Russian newspaper.".
http://www.cisionwire.com/teliasonera/ http://eyjan.is/blog/2008/10/20/umfjollun-um-
teliasonera-in-agreement-to-purchase-additional- tengsl-islendinga-og-russa-ur-russnesku-dagbladi.
shares-in-turkcell-from-cukurova-1. Retrieved
2005-03-25.
[26] TeliaSonera - «Significant events after Year-end
External links
2007». • (English) Alfa Group official website
[27] TeliaSonera - «Delårsrapport Januari-juni 2006», • (Russian) Alfa Group official website
page 16. • TeliaSonera initiates legal action against Russian Alfa
[28] "TeliaSonera - press release". Cision Wire. Group 28 November 2005
http://www.cisionwire.com/teliasonera/ • Western Operators Warned to Beware Altimo’s
teliasonera-in-agreement-to-purchase-additional- Business Record 14 December 2005
shares-in-turkcell-from-cukurova-1. Retrieved • Shareholder dispute could drive Kyivstar into
2009-08-07. technical default 11 April 2007
[29] "Россия желает спасать Исландию из-за давних • Telenor steps up fight on Altimo ’propaganda’ 30
офшорных связей чиновников и бизнесменов". March 2007
The New Times. 2008-10-21. • BP, Russian billionaires, and the Kremlin: a Power
http://www.newsru.com/finance/21oct2008/ Triangle that never was 23 November 2011
iceland_print.html. . Another copy: "Зачем Россия
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Categories:
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