UPDATE 2-Russia drops lawsuit against Telenor
* Asks court to drop injunctions, including Vimpelcom dividend ban
* Telenor says it will be "pragmatic about its ownership"
MOSCOW Nov 23 (Reuters) - Russia's competition watchdog has dropped its case against Norwegian group Telenor for raising its stake in Vimpelcom, paving the way for the Russian mobile firm to resume dividend payments.
The Federal Anti-Monopoly Service filed a lawsuit in April to contest Telenor's dominant stake in Vimpelcom whose strategic importance, the regulator believed, required it be kept free of foreign control.
A settlement became possible after Russian tycoon Mikhail Fridman's Altimo raised its stake in New York-listed Vimpelcom, whose largest market is Russia, overtaking telecoms group Telenor as the biggest shareholder.
The FAS said on Thursday its head, Igor Artemyev, had asked the court to recall all injunctions imposed in connection with the case. A court injunction in May banned 2011 dividend payments by Vimpelcom's Russian unit, OJSC Vimpelcom, prompting the group to also stop dividend payments.
Vimpelcom chief executive Jo Lunder told Reuters last week he expected the board to discuss resuming payments after the lawsuit was dropped.
The decision clears the way for Vimpelcom to hold its annual general meeting to elect the board. It will be held on Dec. 21 provided the court lifts the injunctions before Nov. 27.
"We have felt all along that the claims have been groundless ... We will do what we can to run Vimpelcom forward as profitable company," Telenor spokesman Dag Melgaard said, adding it no reason for exiting Russia any time soon.
"We have a long-term perspective in Russia. However, when Altimo now has secured majority, it does not preclude us being pragmatic about our ownership in the company."
Altimo has a 47.85 percent voting stake in Vimpelcom, while Telenor's share is 43 percent.
The two shareholders have repeatedly bickered over Vimpelcom's strategy and control for the past decade. Telenor said for the first time this month it did not rule out selling its stake.
Vimpelcom would not comment.
Telenor shares were down 0.8 percent at 0935 GMT.