Jon Fredrik Baksaas came back swinging over the weekend, after an internal investigation into his years as chief executive of Telenor uncovered weak leadership. “I have not shown poor judgment,” Baksaas insisted to newspaper Dagens Næringsliv (DN) on Saturday, while a professor countered that he has indeed.
“It must be the definition of chronically poor judgment,” claimed Professor Beate Sjåfjell at the University of Oslo, “when he, in a situation like this with all the information that has come forth, says that he has not shown poor judgment.”
Sjåfjell seems amazed that Baksaas is still fending off criticism despite all the facts that have surfaced in connection with corruption at VimpelCom, the Russian mobile phone firm in which Telenor still holds around a third of the shares. Baksaas was Telenor’s CEO throughout its unhappy involvement with VimpelCom and also sat on VimpelCom’s board. VimpelCom has since admitted to major corruption in connection with its expansion into Uzbekistan, and agreed to pay a huge fine.
Telenor’s chief legal counsel and chief financial officer, who’d been suspended from their duties after Telenor hired Deloitte to investigate the scandal, were terminated last week as part of the “management weaknesses” Deloitte uncovered. They admitted they hadn’t formally brought concerns about VimpelCom’s activities to Baksaas’ attention when they first surfaced, but they did in 2014. Baksaas then waited several months before taking the matter to Telenor’s board, and then Telenor’s chairman at the time waited several months more before sharing concerns with the Norwegian government, which owns 54 percent of Telenor’s stock.
At that point, Baksaas had retired and Chairman Svein Aaser was summarily fired. Baksaas told DN that he would “gladly” have been told about the corruption concerns at VimpelCom earlier than he was. He has also pointed out that Telenor was in a difficult situation as a minority shareholder in VimpelCom: “We couldn’t go into another, stocklisted company’s flow of information.”
‘Deficient’ leadership
Sjåfjell was unrelenting: “I maintain that both as CEO of Telenor and a board member of VimpelCom, Baksaas should have followed this up in an entirely different manner.” The major weaknesses uncovered by Deloitte involved Telenor’s organization, communication and leadership. The company’s was branded as “deficient” in handling its ownership interests in VimpelCom.
Sjåfjell rejects Baksaas’ assertion that he had no model for how corruption could occur. “That’s exactly what he should have had when Telenor chose (through VimpelCom) to do business in Uzbekistan,” she said, noting that it’s considered one of the most corrupt countries on earth.
She thinks he also shirked his duties as a director of VimpelCom, when he failed to ask questions or share concerns about corruption in the Uzbekistan operation. Her bottom line: Baksaas, as both CEO of Telenor and board member of VimpelCom did not do what he should have done to ward off corruption.
More trouble brewing in Bulgaria and Thailand
Birthe Eriksen, a lecturer at the Norwegian business School NHH in Bergen, said she sees a “familiar pattern” where people put on the defense blame everyone but themselves. “Deloitte’s report points to poor judgment, while Baksaas denies that,” Eriksen said. “There are a lot of contradictions here.” While new board leader Gunn Wærsted denies any “bad culture” in Telenor, she also acknowledges a lack of openness, leadership and transparency.
Telenor, meanwhile, may not be finished with corruption cases as the dust from VimpelCom settles. Deloitte’s report also uncovered suspected corruption in two other countries including Thailand, where it involves some questionable leasing agreements.
Newspaper Aftenposten reported that trouble also could be brewing in Bulgaria, but Telenor won’t talk about it, claiming local authorities don’t want it to. Aftenposten believes it’s tied to corruption in Bulgara, where Telenor is the second-largest mobile phone operator with around 3.5 million customers.
newsinenglish.no/Nina Berglund
