KIEV, Ukraine—The Supreme Ukrainian Arbitration Court backed the South Korean Daewoo Corporation in its conflict with the Ukrainian RadioSystems (Wellcom) carrier, in which Daewoo holds a 49-percent stake.
The court ruled that the July decision of Ukrainian shareholders to replace Korean top managers with Ukrainian managers is unlawful.
Korean top manager Hwang In-Dae has been barred from office since the conflict erupted in July. He made a new attempt to get in after the court decision, but it was also in vain.
“Attempts to get into the office are futile so far,” said Alexander Treschuk, a Daewoo legal counsel. He added that the Korean shareholder would not attempt to take over the management of the carrier until the judgment of two Kiev courts, which are considering a Daewoo claim and a Wellcom counterclaim.
Representative of Ukrainian shareholders Yuri Kurmaz, who is actually heading the carrier, refused comment and said the company would appeal against the Supreme Arbitration Court judgment.
But Kurmaz admitted the carrier faced financial problems as banks began to block its accounts after the Supreme Arbitration Court decision.
“We are experiencing difficulties with banking services,” he said and added that the management of the carrier is working to find a way out.
Wellcom belongs to the second echelon of Ukrainian carriers and launched its GSM 900 MHz network in October 1998. The company is operating only in the capital of Kiev and has slightly more than 32,000 subscribers compared with 27,000 in March. Early this year, experts differed in assessing Wellcom’s growth potential, predicting the number of subscribers to be between 50,000 and 80,000 by year-end. However, it is clear now that even the minimal target is unreachable for the carrier, which has been looking for a potential investor of late.
Besides Daewoo, Wellcom’s stock is owned by Ukrainian Ukrfondinvest and Interinvest companies (51 percent), which are affiliated with the commercial Privatbank.
