Let’s get back to the AFK-Fabela deal, though.
It turned out that V.P. had miscalculated a bit, and sold Fabela a few percent of his shares more than had been intended, and as a result lost his controlling interest. He tried to regain control, failed, and when he failed to be chosen as president of the Board of Directors, got upset and sold the rest of his shares. I tried to talk him out of it; I considered him a valuable shareholder, very beneficial to the company. He didn’t listen. Moreover, he encouraged me to become the majority shareholder and supported our plans to become publicly traded on the stock market. Otherwise he would have had trouble selling his own shares in VympelCom at a profit.
Soon after, when MGTS was privatized, V.P. purchased MTS and became our direct competitor. There were times when it looked more like a battle for annihilation rather than competition. We survived thanks to yet another miracle, but that is another story for another time.

Yes, I just remembered a funny episode from that time. When I learned what kind of money V.P. got from Fabela from the sale of our company’s shares, I went to him and suggested he share it with me – it seemed he had made easy money. “Half is yours, V.P., and you should give us the other half for business development. After all, you made money on us.” V.P. had three responses:

“First, you’re a hog. Second, I’m not going to give you half, this minute, but I’ll give you a third. Third, Dima – I owe you.” I think he pronounced these three chopped phrases in the presence of Georgy Vasilyev (at the time V.P., not yet realizing his mistake, thought of VympelCom as his property. I, aside from the question of ownership, always considered it mine. Such was our business in the glow of its early childhood – at least the way I saw it). At the time, one third – and these were millions of dollars – came in more than handy. Later on, there were a few other instances when V.P. would say he owed me. He has long forgotten about it, but deep down inside, it pleases me to think he owes me something! This is worth more than the money.

These curious events happened prior to our historic dinner with Augie.

What followed involved several teams working intensely under Augie’s guidance for almost a year – both within and outside the company – to get things in shape for the stock offer. Negotiations and contracts with banker-underwriters, lawyers, stock exchange management… A company looking to be listed has to, among other things, present its financial history for the past three years… But we were younger than that. Preparation of the prospectus, etc, etc… And just the thought of getting our accounting conform to the U.S. GAAP standards that so few people in the country had any idea about at the time!
Simultaneously the network was being rapidly built up, we were providing service, and the company was becoming dynamic and a financial success.
While service was only available in the Moscow metropolitan area, and only in DAMPS (even though we already held the license for DCS-1800), the company saw phenomenal results in 1995. Our ARPU (monthly income from one subscriber’s call volume) was $374 (!), while AirTouch’s (USA) was at $52. We proudly touted these results to investment bankers – potential auctioneers – in Europe and America during a two week tour (“Road Show”).
Excerpts from this presentation are in the Appendix.
Speaking of results, I at first wrote “the company achieved results,” but then out of modesty changed it to “saw results.” By this I mean we owed our success not only to the heroic efforts of the company (I hope nobody doubts that), but also to the pristine state of the Russian market (Everything in its own time, guys – from start to finish). Some amateur market analysts (and everyone was an amateur back then on the Russian market) were saying that our subscribers were the three B’s: bankers, bandits and some other “b”… I forgot. Those same analysts also explained that our record subscriber traffic was due to the fact that about 25% of their speech consisted of expletives. The company never confirmed this number, but neither did it deny it. We had better things to do…

One of the underwriters working on the VympelCom IPO and share offer was the investment bank Renaissance Capital, co-owned by a Russian-American, Leonid Rozhetskin. I ended up having several unexpected intense adventures with him, so here I simply offer you a photo of the two of us around the time of our first acquaintance. The photo is small because of its poor resolution, but we are quite recognizable. It was taken in New York a couple of months before the IPO.

Let us, however, get back to the stock exchange.
Trading in the shares of the first Russian company in recent history on this most famous trading floor was preceded by a performance of a Russian song and dance ensemble. I missed most of it. I heard it was a wonderful, uplifting Russian ensemble – made up mostly of Jews from Brighton Beach.
I was honored with ringing the bell at the opening of trade (what a pity that I cannot find the photo). On the first day our shares did quite well. In general, the market has been favorable to our company, not counting the drops associated with a couple of attempts by Russian authorities to put us out of business. Later I hope to tell a story or two about that.

SO HERE WE ARE, MASTERS OF THE STOCK EXCHANGE!
We raised serious cash for business development. Big by the standards of the time, and not on credit – we didn’t have to give it back. For a long time, many of my colleagues would comment on this with amazement.
And, by the way, some of us held a significant number of shares and in an instant, publicly and officially, got rich. For an ordinary Soviet man this was strange and, believe it or not, at the time not an easy to grasp metamorphosis.

Here is one more picture from that party. Next to me is – yes, yes, the one and only Yegor Gaidar. In 1996, after our company went through a restructuring, I offered Yegor Timurovich, then a recent prime minister, a seat on our Board of Directors as an independent director. The notion, explained to me by Augie, was barely known in Russia then. Gaidar took his time to agree to do it after a thorough study of the company, its history and its owners.
The very presence of Gaidar – the globally renowned reformer and economist – on our Board of Directors, bolstered investor confidence in VympelCom’s honesty and respectability. Besides Gaidar other famous economists, such as E.G. Yasin and G.Kh. Popov, honored us by being on our Board of Directors.
The tall man slightly in the background that is telling me something is Boris Jordan. He was then president of the Board of Directors and a co-owner of Renaissance Capital Bank.

And now I would like to show you one very precious souvenir.

In the spring of 2003, when I had been in retirement for about two years, Melissa Schwartz, Augie Fabela and Valery Goldin came to visit me in my office on the occasion of my anniversary. Melissa and Augie had just arrived from America and brought me a gift – the same New York Stock Exchange (NYSE) flag that was there on the day of our IPO. They told me it was a present from the president of the Stock Exchange.
We had our picture taken, holding the flag and other memorabilia from that day.
Melissa is on the far left, she is a lawyer and works for the firm Akin Gamp, Strauss, Hauer & Feld, L.L.P. She provided legal support to our company for a long time, including restructuring the company for the IPO, establishing legal ethos of an independent publicly held company in keeping with the norms of conduct on the stock exchange (The goal of these norms, which is to maintain the transparency of the company and to protect the rights of shareholders, now seems understandable and natural, but back then appeared to us, still a little bit Soviet people, strange indeed).

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