VEON: International Investors ‘Confused’ Over Recent Kyivstar Corporate Rights Seizure

VEON CEO Kaan Terzioglu said that international investors are “confused” amidst the recent seizure of part of Kyivstar’s “corporate rights” by the Ukrainian government and that foreign investors’ rights should be protected in Ukraine.

VEON, a multinational telecommunications company headquartered in the Netherlands, is the sole owner of Kyivstar, Ukraine’s biggest telecommunications company.

According to Terzioglu, he received messages of congratulations when VEON announced its exit from Russia — but now, the same investors are reaching out to him to understand why Kyivstar’s corporate rights were seized by the Ukrainian government. Investors from the US — who own up to 30 percent of VEON’s shares — and the UK have also reached out to their congressmen and parliament members for assistance.

Terzioglu added that they learned of the news through social media and news headlines instead of the Ukrainian government, and these news headlines have cost them dearly.

“These headlines in the media cost investors $150 million. I started getting letters from them," said Terzioglu.

Talks are due to take place between shareholders of VEON and Ukrainian officials, as well as representatives from embassies whose investors are affected by the recent ruling of the Shevchenkivskyi Court in Kyiv regarding the seizure of the 47% Kyivstar's corporate rights, which allegedly belong to the Russіa-linked sanctioned individuals. Terzioglu said he respects the government’s concerns, and they are open to dialogues regarding the meaning behind the decision.

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“Our rights at VEON, on Kyivstar, [are] unquestionable,” said Terzioglu. He added that Kyivstar is a blue chip company in Ukraine and can be a shining example for other companies — and foreign investments — if the situation is handled tactfully.

On Oct. 6, Ukraine’s Security Service (SBU) announced the seizure of all “corporate rights” of Kyivstar in relation to sanctions placed over three Russian oligarchs, meaning that the government would take control over 99 percent of the telecommunications company’s authorized capital.

The court later amended the ruling, claiming that only 47.8 percent of Kyivstar’s “corporate rights” are subjected to government seizure, corresponding to the number of shares the oligarchs controlled through LetterOne, a UK fund founded by the three wanted oligarchs.

In regards to the group’s relation to Russia and the sanctioned individuals, Terzioglu explained that VEON is a publicly owned company, whereas the sanctioned individuals have "zero" ownership in Kyivstar and don't have direct control over its decisions and economic interests.

“VEON has no controlling shareholders, and none of the mentioned names [...] has any direct interest, any access, to any economic values, and they have zero ability [to influence] any decisions we make,” he said.

VEON has drawn a clear stance on the war in Ukraine since February 2022 and has since exited the Russian market and sold off its assets in the country. Earlier this month, it closed the sale of its Russian assets and operations to a group of senior members of the PJSC VimpelCom management team, completing its exit from the Russian market.

As for its plans in Ukraine, the company has already pledged $600 million over the next three years to help rebuild the country. Through Kyivstar, the funds will be used towards rebuilding and developing Ukraine’s infrastructure, as well as different community projects.

Thus far, the company has paid since 2022 almost Hr.20 billion in tax and fees and donated Hr.1.4 billion to charitable initiatives across Ukraine. The company believes in rebuilding the country with a sustainable infrastructure, and that it can be the biggest partner for Ukraine and for foreign investors to invest in its economy.

Despite the recent ruling, Kyivstar’s president Oleksandr Komarov assures that operations will continue as usual. As VEON reaffirms its support and commitment to Ukraine, it also maintains a positive business outlook and will continue to thrive in its global operations, serving customers from around the world.