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“Kyivstar” rejects rumors of possible nationalization due to sanctioned Russian shareholders of VEON

    Rumors about it began to appear on the market along with reports about the nationalization of Sense Bank , the former Alfa-Bank Ukraine, owned by the Russian oligarch Mikhail Fridman, which was subject to international and Ukrainian sanctions. In turn, 100% of Kyivstar shares are owned by the VEON holding, 47.9% of which belongs to Letter One, with the same Russian shareholder, Friedman.

    Thus, the nationalization of one asset of a sanctioned Russian oligarch, whose companies continue to work and earn profits in Russia , can push the nationalization of others as well. Several sources on the market speak about this at once, but without specifics, that is, there are no definite solutions in this direction yet. Which is understandable, because even in the case of Sense Bank, for the nationalization of which amendments to the legislation have been prepared , the state may face international lawsuits due to the “inviolability of property rights” in international law.

    “Kyivstar” President Oleksandr Komarov in an interview with “Forbes” on July 13 called the possible nationalization of the operator “an unfortunate mistake” and “a big blow to the investment attractiveness” of the country, however, he also stated that “this risk does not exist.”

    “The decision on nationalization would be a regrettable mistake, a big blow to investment attractiveness and the subject of long-term international litigation. But I believe that this risk does not exist. There is a lot of PR around, but it is a bit of “white noise”. Does it help work? No. But you have to work. Because tens of millions of people have to receive communication. “Kyivstar” receives hundreds of thousands of subscribers from other networks every day through national roaming,” Komarov noted at the time.

    Kyivstar itself, despite the sanctioned shareholders, is confident in its strong legal position, stating that “no shareholder exerts a decisive influence on VEON’s activities” and, accordingly, on the operator’s work. Here are the statements of the company’s press service in full:

    “We don’t know anything about nationalization. The company does not comment on rumors and speculations. VEON shares are traded on the stock exchanges of the USA and the European Union. Among the owners of shares are thousands of legal entities and individuals, including investment funds of the USA, Great Britain, Italy, etc. No shareholder has a majority stake and does not have a decisive influence on the activities of VEON and, accordingly, on the activities of Kyivstar.

    Even at the beginning of the full-scale war, the VEON group announced its decision to withdraw from the Russian market. On May 30, 2023, the company completed the necessary legal formalities and procedures related to this initiative, which was reported to the public. Persons from among the shareholders of VEON, who have been sanctioned by the USA and Great Britain, have no influence on the activities of the telecom group. According to publicly available information, they have been blocked from accessing their financial assets.

    PJSC “Kyivstar” does not have ultimate beneficial owners, i.e. persons who could exert a decisive influence on the management and/or control the company’s activities. “Kyivstar” is managed by Ukrainian management and a Board of Directors consisting of citizens of the USA, the EU and Ukraine. “Kyivstar” company operates exclusively in the Ukrainian legal field and is governed by the legislation of Ukraine.”

    In any case, it can be stated that currently Kyivstar subscribers have nothing to worry about, no real steps towards the nationalization of the operator by the state have taken place yet. But even if this happens, it will not immediately affect the work of one of the country’s largest telecom companies, because even in peacetime communication is of strategic importance, not to mention wartime.