Moscow, Russia – July 20, 2005 – Sistema (LSE: SSA) today announced that a lawsuit has been filed against it and its subsidiary, Limited Liability Partnership VAST (“VAST”), by Open Joint Stock Company ASVT (“ASVT”). Sistema owns 51% of VAST and ASVT owns 49% of VAST. VAST owns approximately 3% of Mobile TeleSystems OJSC, or MTS.
The law suit was filed with the Arbitration Court of Moscow, and case number is A40-28488/05-134-197. ASVT is seeking the termination of VAST's foundation agreement and the liquidation of VAST due to the non-compliance of the corporate form of VAST with Russian law requirements. Inspectorate No. 10 of the Federal Tax Service for the Central Administrative District of Moscow has been joined in the proceedings as a third party. The court hearing where the law suit is to be determined substantively is scheduled for July 27, 2005. Sistema has provided its reasoned objections against ASVT's claims.
The liquidation of VAST, if and when ultimately effected, would result in a distribution of its assets to its shareholders in accordance with their respective ownership interests, and is not expected to affect Sistema’s current majority ownership in MTS. Sistema is evaluating any potential tax liability in connection with any such distribution of assets.