OREANDA-NEWS. On 14 January 2009 Southern Telecommunications Company (“UTK”) [(RTS: KUBN, KUBNP; МICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District reported that on 13th January 2009 Court of Cassation held juridical proceeding on the results of the tax inspection carried out in relation to the company’s activities in 2004-2006 and upheld the verdicts issued by the Moscow Arbitration Court on 25th June 2008 and by the Ninth Arbitration Court of Appeal on 11th September 2008.

An inspection of issues concerning compliance with tax and fee legislation was carried out in relation to the company’s activities from January 1, 2004 until December 31, 2006. Based on the results of the inspection, tax sanctions were imposed amounting to Rub 217.6 mln. After lodging an objection to the decision of the tax authorities on imposing liability for alleged tax offenses, STC filed a lawsuit with the Moscow Arbitration Court requesting invalidation of a claim for Rub 216.4 mln .

The Moscow Arbitration Court on June 25, 2008 issued a verdict on the litigation between STC and Inspectorate # 7 of the Tax Ministry of the Russian Federation.  The company managed to prove the legitimacy of its position, which was upheld completely in a court of law.

Based on the results of the proceedings, Inspectorate # 7 of the Tax Ministry of the Russian Federation filed an appeal with the Moscow Ninth Arbitration Court of Appeal to deny the verdict of the Moscow Arbitration Court.