SISTEMA JSC is a stockholder of KVANT JSC owning 4,863,000 voting sharesor 69.6% of their total.

In 1998 through the use of a forged proxy 2, 398, 500 (34.3%) shares of KVANT JSC were with drawn from this SISTEMA- affiliated company’s account and placed on personal accounts of ZAO IVK (Informatsionnaya vnedrencheskaya kompaniya).

Since SISTEMA JSFC retained control over the enterprise and ZAO IVK wasa major partner of KVANT JSC in assembling computers, representatives of SISTEMA tried to solve the problem of stolen shares through arrangements with ZAO IVK.

However, at the beginning of 2001 ZAO IVK made an attempt to gain acomplete control over KVANT JSC by filing for bankruptcy of the enterprise (the procedure was over in 4 months after its initiation) and, later, by illegalseizure of the enterprise. It was done the following way:

On February 15, 2001 V.Chepko with a group of officers from the Moscow Central department of internal affairs blocked without permission the territory of KVANT JSC and held an extra ordinary meeting of stockholders with participation of the only one of them, e.g. ZAO IVK. At this meeting Chepko was elected general director of KVANT JSC. The enterprise’s board of directors was also elected with ZAO IVK’s general director G. Sizonenko at the head.

Basing on the decision of the meeting held on February 15, 2001 Mr.Chepko and the board of directors transferred the register of KVANT JSC to other registrar, issued bills of KVANT JSC for more than 40 million rubles and handed them over to ZAO IVK. Besides, they allegedly held two meetings of KVANT’s stockholders (June15 and October 4, 2001) but in fact not a single stockholder of KVANT JSC except ZAO IVK was present and not a single stockholder of KVANT JSC has received their minutes so far.

 ZAO IVK keeps declaring that it owns the controlling block of stock of KVANT JSC. But it does not correspond to the facts: even if the block of shares stolen from SISTEMA JSFC is taken into account, ZAO IVK owns less than 45% of the stock (since 2000 preferred shares of KVANT JSC have also beenthe voting ones due to nonpayment of dividends).

All results of the meeting of KVANT’s stockholders on February 15, 2001were found invalid as far back as July 2001 by the decision of the Arbitration court of the Moscow region. However, until now Mr. Chepko and KVANT’s board of directors have not executed the decision yet.

As a result of the suit filed by one of KVANT’s stockholders, properties of KVANT JSC and ZAO IVK were arrested on August 22, 2002 and handed over tothe safe custody of S. Kabayev, who was the chairman of KVANT’s board of directors until February 15, 2001.

During the night between August 28 and August 29, 2002 V.Chepko led agroup of 60 commandos from the Dzerzhinsky division of internal troops,employees of Anaconda – 21st century private guard enterprise and officers ofthe department of internal affairs of the city of Zelenograd. They stormed the territory of KVANT JSC and using baseball bats brutally beat up guards of the guard service agency, who were on duty protecting the arrested property. The attackers were holding two guards as well as the deputy business manager of KVANT JSC as their prisoners for more than seven hours threatening them with execution.

At present, the arrested property of KVANT JSC is persistently transported from the territory of the enterprise as officers of Zelenograd’s department of internal affairs are escorting the trucks carrying it.

SISTEMA JSFC regards as unprecedented bringing troops in the territory of a civil enterprise and using illegal aggressive methods to solve property disputes. The corporation has filed appropriate statements with the Office ofthe Procurator-General of the Russian Federation, Central command of internal troops and Central Office of security service at the Russian Ministry of internal affairs.