Trond Giske, Norway’s government minister for business and trade, has fired the chairman of Norwegian telecoms firm Telenor, in which the state has a majority stake. Harald Norvik, a former chief executive of Statoil, had been Telenor’s chairman for the past five years.
Giske wouldn’t initially say why Norvik was asked to resign from the top post at Telenor, but later said it was based an “a total evaluation” of the job Norvik has done.
Norvik himself said candidly that Giske, “representing the majority shareholder in Telenor ASA,” had “expressed a lack of confidence in the chairman of Telenor” and that he had therefore felt compelled “to step down as chairman of Telenor.”
The large Norwegian telecoms firm that has invested billions in international expansion was already back in the headlines this week because of the huge losses it has suffered on its mobile phone operations in India. Giske has traveled to India for meetings with his government counterparts on Telenor’s behalf, after Telenor lost operating licenses in a supreme court decision tied to a corruption scandal in which Telenor was not directly involved.
But Norvik said Giske’s “lack of confidence” in him instead followed what he called “the handling of the TV2 issue in January this year.” That case involved a messy political conflict over a stake Telenor indirectly held in Norway’s nationwide commercial TV channel TV2, which was eventually sold to Egmont of Denmark. Giske had tried to block the sale, much to Norvik’s displeasure over government meddling in a business transaction, on the grounds that TV2 should remain in Norwegian hands.
Giske ended up facing disciplinary action himself over his own handling of the TV 2 affair but now appears to have won in the end. As trade minister, he has authority over the state’s investments, and he clearly was angry and embarrassed over how Telenor reacted to his objections over the TV2 sale. Telenor’s heavy losses in India also have given Giske more ammunition to punish Telenor’s leadership.
The question now is how long Telenor’s chief executive, Jon Fredrik Baksaas, will last in his top management post. Giske has the power to place someone he likes and trusts in Norvik’s place as chairman. That person will in turn have the power to retain or fire Baksaas. Given the fact that Baksaas supported Norvik’s objections to Giske’s interference in the TV2 sale, his days may be numbered.
Giske’s interference, meanwhile, continues to spark criticism from opposition politicians in Parliament who fear that his actions will scare investors away from investing in Norwegian companies. Giske also has his critics within his own party, Labour, and has been at odds on various issues with both Prime Minister Jens Stoltenberg and Foreign Minister Jonas Gahr Støre. They remained quiet on Wednesday when Norvik was fired.
Norvik has had ties to the Labour Party himself and is known for his experience in dealing with the political aspects of business in Norway. Nonetheless he’s now lost his Telenor chairmanship, at the hands of a Labour minister. Norvik will continue in his post, though, until a new chairman has been selected.
Views and News from Norway/Nina Berglund
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