Investors in troubled mobile operator VimpelCom have filed a class action lawsuit alleging the company misled them during the period from June 30, 2011 to November 2, 2015.
According to a Tuesday release from the Law Offices of Howard G. Smith, the lawsuit alleges VimpelCom’s investors have “suffered greatly by the sharp decline” in the company’s share price that has resulted from ongoing investigations and further alleges the company made “false and/or misleading statements” about its business practices.
“The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) that the Company’s business practices were in violation of applicable laws; and, (2) that, as a result of the foregoing, the Company’s statements about its business, operations, and prospects, were false and misleading and/or lacked a reasonable basis,” the release said.
VimpelCom, the third-largest mobile operator in Russia, is currently under investigation by the U.S. Securities and Exchange Commission, the U.S. Department of Justice and the Dutch Public Prosecution Service in relation to its business in Uzbekistan. U.S. authorities in particular are probing VimpelCom and two other companies – Mobile TeleSystems PJSC and TeliaSonera AB – on allegations the companies paid hundreds of millions of dollars in bribes to secure wireless spectrum in Uzbekistan.
In light of the allegations, Norwegian telecom company Telenor announced plans to sell its stake in VimpelCom to focus on its core operations.
Last week, Norwegian prosecutors detained former VimpelCom chief executive Jo Lunder – who ran the company from 2011 to 2015 – for questioning on suspicions that he was involved in the alleged corruption. Lunder was released from custody yesterday.
On Friday, VimpelCom posted a net loss of just over $1 billion in the third quarter thanks to its decision to set aside $900 million to deal with litigation costs related to the investigations.
According to Tuesday’s release, VimpelCom investors interested in taking part in the class action lawsuit have until January 4, 2016 to file a motion to be appointed as lead plaintiff.
