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Thursday, July 18, 2024

Police question Telenor’s boss

Jon Fredrik Baksaas, chief executive of state-controlled telecoms giant Telenor, has undergone questioning by white-collar crime police investigators in both Norway and the Netherlands, in connection with the ongoing corruption probe into mobile phone firm VimpelCom. Telenor owns a major stake in VimpelCom and Baksaas sits on its board of directors.

CEO Jon Fredrik Baksaas, pictured here at the World Economic Forum, has taken harsh criticism for his handling of the outages. PHOTO: Wikipedia Commons
Telenor CEO Jon Fredrik Baksaas, pictured here at the World Economic Forum, is under increasing pressure to account for how Telenor’s partly owned mobile phone company VimpelCom has done business in Uzbekistan. PHOTO: Wikipedia Commons

Baksaas and Telenor have long fended off the suspicions of corruption at VimpelCom, which is owned by Telenor and the Russian oligarch Mikhail Fridman. Norwegian Jo Lunder, a former top Telenor executive, has been VimpelCom’s chief executive since 2011, when Telenor and Fridman ended a lengthy battle for control over the company and its main office was relocated to Amsterdam.

Newspaper Dagens Næringsliv (DN) was among the first to report in depth on suspicions that VimpelCom won the rights to do business in Uzbekistan after paying bribes to a Gibraltar company tied Gulnara Karimova, the daughter of Uzbekistan’s dictator. Both VimpelCom and TeliaSonera, the Swedish telecoms firm, are under investigation for allegedly paying bribes to win access to the Uzbeikstan market. TeliaSonera’s chief executive, chairman and several other executives have all had to resign as a consequence of the corruption allegations, while Telenor and VimpelCom have denied that any bribes were involved when VimpelCom won its mobile phone license in Uzbekistan in 2007.

More demands for more answers
Now, since the police investigation into VimpelCom’s practices began in March in several countries, both Baksaas and other Telenor executives have been called in for questioning.   Members of the Norwegian Parliament are also demanding more answers, since the state still owns a 54 percent stake in Telenor.

“We have drafted the issue in committee and decided to send a letter to trade minister Monica Mæland, to ask for an accounting,” Martin Kolberg, the Labour Party veteran who leads the parliament’s disciplinary committee, told DN on Wednesday. The move comes after both DN and newspaper Klassekampen have reported that VimpelCom paid the equivalent of NOK 600 million to the company in Gibraltar as part of the process to gain entry to the Uzbekistan market. Swedish prosecutor Berndt Berger, who is investigating TeliaSonera’s means of doing business in Uzbekistan, told DN on Tuesday that VimpelCom and TeliaSonera used exactly the same means. Telenor, meanwhile, has insisted the processes were different.

Dutch authorities suspect that the payments made to the Gibraltar firm were actually bribes paid to Karimova, not the Uzbekistan state, reported DN. “The committee is reacting to what’s been reported in the media,” Kolberg told DN. “I won’t say more until we have a better overview of the case.”

Chairman and CEO called in
Mæland, the government minister in charge of business and trade, called Baksaas and Telenor’s chairman, Svein Aaser, in for a meeting on Wednesday.

“Now it’s important that Telenor speaks more and spends less time staying silent,” Geir Pollestad of the Center Party, who leads the Parliament’s committee for business and trade issues, told DN. “It looks like the TeliaSonera and VimpelCom cases have a lot in common, except that TeliaSonera went in (to Uzbekistan) with 100 percent control while Telenor had a minority stake (through Vimpelcom) without so much control. That was a conscious choice. It’s questionable how wise it was, when everyone knows Uzbekistan is one of the world’s most corrupt countries.”

One of Norway’s major pension funds, Folketrygdfondet, also wants to have a meeting with Telenor, since it’s Telenor’s second-largest shareholder after the state. “We have taken this issue up with Telenor earlier,” Nils Bastiansen of Folketrygdfondet told DN. “Now we want to have a dialogue.”

Telenor’s lack of answers
Telenor officials have earlier claimed there was a big difference in how VimpelCom and TeliaSonera did business when both went into Uzbekistan at about the same time, but haven’t clarified what the difference was. DN reported that Telenor officials have never answered concrete questions or revealed documentation as to how Telenor might have assured itself that VimpelCom was avoiding corruption in a country known for it.

Asked by DN why VimpelCom paid NOK 600 million (nearly USD 100 million) to the Gibraltar company called Takilant, Telenor responded that VimpelCom addressed the transaction in its annual report and VimpelCom itself must address any further questions about it.

Asked by DN whether Telenor believes the money VimpelCom paid to Talikant wound up with the state as rightful owner, Telenor responded that it “welcomed exactly that question” and hoped the ongoing investigation would answer it.

Asked by DN whether any of the four Norwegians who sat on VimpelCom’s board at the time, all of whom were Telenor veterans, voted against making the payments or even questioned them, Telenor responded that Telenor had received “repeated assurances” that VimpelCom’s investments satisfied American anti-corruption laws. Berglund



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