UPDATED: Norway’s embattled telecoms firm Telenor was tipped off to possible corruption at its partly owned Russian mobile phone firm, VimpelCom, as far back as the fall of 2011. Now the man who ran Telenor at the time, newly retired Jon Fredrik Baksaas, is losing his ongoing consulting job with the company and the bonus he was due to be paid for this year. He also resigned from all his seats on the boards of Telenor subsidiaries and severed all ties to the company.
Newspaper Dagens Næringsliv (DN) reported Monday morning that no one at Telenor, under the leadership of chief executive Baksaas, responded to the tips that were emailed both to officials at Telenor and to the man who had been Telenor’s main representative on VimpelCom’s board, and then became its chief executive, Jo Lunder. DN reported that Telenor won’t answer what, if anything, was done after the Oslo-based company received emails from an as-yet unidentified whistleblower four years ago.
Later on Monday morning, Baksaas himself issued a press release stating that the recent developments in the “ongoing investigation of VimpelCom have made my role as a strategic adviser for the board of Telenor demanding.” Baksaas retired from Telenor last summer with a generous pension plan, but also had secured the consulting post at an annual salary of NOK 5.5 million (USD 640,000).
His contract was supposed to run through 2017, and also allowed for bonus payments. Now Telenor’s former CEO and Telenor’s board, which is also under fire because of the corruption allegations, reportedly have “agreed” that Baksaas give up both his consulting job and the bonus he stood to receive for this year. He already received a bonus of NOK 1.7 million in January for allegedly following Telenor’s ethical guidelines in 2014. That bonus has received much critical attention in recent days, as the corruption case involving both Telenor and VimpelCom spreads.
Now, after cutting all remaining ties to the state-controlled Telenor, it’s unclear whether he’ll respond to any call to testify at a looming parliamentary hearing on the Telenor/VimpelCom corruption case. He’d be expected to testify, but now is under no legal obligation to do so, committee members conceded Monday afternoon.
Lunder fighting back
Meanwhile Lunder, Telenor’s former so-called “wonderboy” who built up not only Telenor’s own huge mobile phone business but also key portions of its international expansion in the sector, is currently fighting to preserve his own reputation and professional career. He was still in jail Monday morning after being arrested on corruption charges last week, but won a key battle late Friday when an Oslo court didn’t find enough evidence to support the charges. Prosecutors appealed, which is why Lunder remained in custody through the weekend.
“He’s holding up well and was transferred from glattcelle (the Norwegian equivalent of a holding tank) to a normal cell,” Lunder’s prominent defense attorney, Cato Schiøtz, told DN on Saturday. “That makes all the difference in the world, after two days with terrible sleep.”
Lunder also now appears keen to fight back and refuse to take any fall alone. After several years of refusing to comment on rising and published suspicions of bribery at the company in which Telenor had invested heavily and he ran, Lunder has produced emails that reportedly may exonerate him, or at least prove that VimpelCom’s co-owners at Telenor were aware of bribery suspicions and failed to act.
DN obtained court documents from Lunder’s custody hearing on Friday, which was held behind closed doors, that disclose how Lunder had received an emailed warning about possible corruption tied to VimpelCom’s expansion into Uzbekistan. It involved USD 30 million paid out to a Gibraltar company, called Takilant, which in turn was tied to the daughter of Uzbekistan’s dictator.
It was those payments, made while Lunder was VimpelCom’s CEO, that formed the basis for his arrest last Wednesday night. Lunder contends that when he learned of them, he ordered that they be halted until he received an explanation for them. “He said ‘no, stop, investigate’ and ‘go’ after external examination of them failed to find anything suspicious,” Schiøtz told DN on Monday. “That’s why he has, as I see it, a very good case (for defending himself).”
DN reported that the court records show Lunder wasn’t the only one warned about the payments back in 2011. Two emails were also sent about the payments, allegedly to someone at Telenor, and they weren’t forwarded to Lunder. “As far as he can remember,” read the court documents, Lunder “couldn’t remember any of the recipients of those emails contacting him about their content either.”
No answers from Telenor
Telenor won’t answer questions about what the company did after receiving the emails. Schiøtz claims he knows the identities of both who sent the emails and their recipients, but told DN he cannot say who they are. Newspaper VG has reported that they were sent by other Telenor employees who’d been sent to work at VimpelCom and reported back to the home office in Norway. A Telenor spokesman confirmed to DN that Telenor had indeed placed some of its own people at VimpelCom but he wouldn’t comment further.
The court documents don’t reveal any identities either. Much of the information swirling around the corruption case has been withheld by both court officials, government officials and the companies themselves out of regard for the international criminal investigation of VimpelCom going on in four countries.
Telenor’s current management, meanwhile, is clearly trying to distance itself from both Baksaas and Lunder, get the corruption case involving Telenor and VimpelCom resolved, and move on. Baksaas, meanwhile, stated that it was “important” that Telenor and Telenor’s board get space “to handle the situation in the best possible manner.” Baksaas indicated it was his decision to give up his consulting post, salary and bonus, and that he “wished the best for Telenor and all the company’s employees.”