The chief executive and hundreds of other employees of a leading Armenian telecommunication company have reportedly tendered their resignations in protest against its majority shareholders’ plans to buy a rival firm.
The company, Ucom, owns one of Armenia’s three mobile phone networks and is also the country’s largest Internet service provider. It announced late last year plans to purchase the Armenian subsidiary of VEON, an Amsterdam-based operator partly controlled by a Russian tycoon.
VEON Armenia too provides mobile and fixed-line telephony and Internet services. Its Beeline wireless network is the oldest in the country.
VEON and Ucom appeared to have agreed the terms of the deal in December and have since been awaiting its approval by Armenia’s government as well as utility and anti-trust regulators. The authorities are understood to be looking into the proposed merger’s impact on competition in the domestic telecom sector.
A Ucom employee who asked not to be identified told RFE/RL’s Armenian service that the company’s executive director, Hayk Yesayan, resigned after it emerged that Ucom will be run by Beeline’s current Russian chief executive, Andrey Pyatakhin, if the deal goes through. At least 350 other Ucom employees also decided to quit in protest, claimed the source.
According to the source, Yesayan and his brother Aleksandr oppose Beeline’s takeover also because it would dilute their 6 percent stake in Ucom.
Ucom, which employs around 1,800 people, did not comment on this information as of Friday evening. Yesayan also did not make any public statements.
A spokeswoman for Beeline, Nara Nazarian, said Pyatakhin is “continuing to occupy his post and not planning to leave it.” “The deal [with Ucom] is still under discussion and we are not commenting on it,” she told RFE/RL’s Armenian service.
Asked whether Pyatakhin indeed wants to manage Ucom if Beeline’s takeover is cleared by the Armenian authorities, Nazarian said: “Such questions should be put to Ucom’s shareholders.”
Ucom is controlled by the extended family of Gagik Khachatrian, a controversial former Armenian finance minister who was arrested last August on corruption charges denied by him. Khachatrian’s two sons and a nephew own a combined 77 percent of its stock.
Late last month, the three men’s assets were frozen as part of the continuing criminal investigation into Khachatrian. The ex-minister’s lawyers condemned the investigators’ decision as illegal.
Meanwhile, Armenia’s Ministry of High-Tech Industry expressed concern about the controversy. In a statement, it urged the telecom operators and their workers to “display responsibility” and act in conformity with a coronavirus-related state of emergency. As part of the emergency rule declared last month, the government banned all strikes in the country.
The ministry also stressed that it is continuing to weigh up the proposed deal between Ucom and VEON and has not agreed to it yet.
A spokeswoman for Armenia’s Public Services Regulatory Commission likewise said: “The deal has not been concluded and is still being examined.”
Ucom’s acquisition of VEON Armenia also needs to be approved by another regulatory body, the State Commission for the Protection of Economic Competition.
Ucom’s mobile phone network was built and launched by the French telecom giant Orange in 2009. The Armenian company bought it from Orange for an undisclosed amount in 2015 after growing rapidly and becoming the country’s leading Internet and cable TV service provider. The Yesayan brothers are widely credited with turning Ucom into one of Armenia’s most successful businesses.
For its part, VEON paid $376 million to buy its Armenian phone networks from a Greek firm in 2006. The company was headquartered in Moscow and known as VimpelCom at the time. Russian billionaire Mikhail Fridman’s LetterOne fund remains VEON’s largest shareholder.