The economic court of Kiev upheld the privatization of “Ukrtelecom”

The economic court of Kiev refused to the state property Fund (SPF) of Ukraine in the lawsuit to “ESU” about breaking the privatization contract of purchase and sale of 92,79% of stocks “Ukrtelecom” and the recovery 2,171 billion. The decision the court issued on 7 November 2018. Such information was promulgated in judicial decisions base on November 21. According to the court, “ESU” was denied in the counter claim to the state property Fund “on the recognition of the terminated obligations under the contract due to impossibility of its execution”.

Recall that in 2017, the state property Fund of Ukraine filed a claim to court on termination of the contract of purchase and sale of government shares of “Ukrtelecom” at the end of the privatization tender. The lawsuit dealt with the termination of the contract of purchase and sale of shares of “Ukrtelecom” from 2011, in which it was sold 92,791% of the share capital of JSC “Ukrtelecom” for 10 billion 575.1 million UAH (at the time — about $1.3 billion).

In may 2016 the state property Fund initiated a check on the implementation of the privatization contract. The test continued until February 2017. It was during her Foundation it was revealed that the buyer had breached its obligations “in terms of making investments in the monetary form”, which was an integral part of this agreement. In addition, FGI has accused then the company that it did not create the state system of governmental communication and organization networks special communication was also one of the conditions of the privatization contract.

12 December 2017, the Kyiv court of Appeals sided with SPF and decided to cancel the privatization contract in 2011 and the return of “Ukrtelecom” for the state.

However, on 5 July 2018 the Supreme court satisfied the cassation appeal of LLC “ESU” on the decision of Economic court of Kiev from October 19, and Kiev economic court of appeal dated 12 December 2017 about breaking the privatization contract of purchase and sale of 92,791% of shares of PJSC “Ukrtelecom”. The case was forwarded in the first instance.

In addition, the company of Rinat Akhmetov’s SCM Financial ready to return the company Raga Establishment Ltd., sold him in 2013, Telecom operator “Ukrtelecom”, receiving in return $100 million “Our position is simple: Raga violated obligations under the contract of purchase and sale with the SCM Financial. We must therefore return the shares of “Ukrtelecom” Raga, and they have given us back our prepayment of $100 million And then Raga and the state represented by state property Fund must solve this situation among themselves and come to an agreement. The state can leave the “Ukrtelecom” Raga or to return to their property”, — explained the Director for international relations and investor relations of SCM Jock Mendoza-Wilson.

Recall that in 2016 the Cypriot Raga Establishment, formerly called Epic Telecom Invest and privatize “Ukrtelecom”, the state in 2011, filed a lawsuit in the London court of international arbitration, accusing SCM Financial Overseas to pay only $100 million of the $860 million under the concluded in 2013 the transaction of resale “Ukrtelecom”. A London court in June of 2017 took the side of Raga and ordered SCM to pay $760 million for the “Ukrtelecom” and $60.4 million of interest and court costs.

The Cyprus court decided the dispute between the “System capital Management” and Raga Establishment that sold “Ukrtelecom” Akhmetov’s companies in favor of SCM. The assets were unfrozen.

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