Monthly Archives: March 2014

TeliaSonera’s new CEO imposes strategy to avoid scandal that caused predecessor to go

Johan Dennelind is just a few months into one of the most challenging leadership positions in the industry, following the scandal that caused TeliaSonera’s previous CEO to quit. Now Dennelind tells Alan Burkitt-Gray how he is introducing new transparent policies

Johan Dennelind: The Uzbekistan scandal is part of the history
and part of the future. We need to do things in a more thorough
way and carry out our transactions in a more transparent
manner. TeliaSonera is looking at all of our sustainability issues
in the broader sense. We are going through key areas of the
sustainability field and embedding that into company policy 

It’s just over a year since the then CEO of TeliaSonera, Lars Nyberg, paid the penalty for the company’s unfortunate relationship with its business partner in Uzbekistan.

The new CEO, Johan Dennelind, is several months into a new company-wide strategy to make sure nothing like that happens again. It is part of his corporate sustainability policy, he says – because it’s clear that the sustainability of the company depends on a set of clearly understood measures to keep it well clear of any further allegations of that kind.

An investigation did not find anything to show that either TeliaSonera or any of executives had committed bribery or taken part in money laundering over the acquisition of Uzbekistan operator Coscom in July 2007. But Nyberg resigned the moment the investigators – from Swedish law firm Mannheimer Swartling – reported on the scandal.

TeliaSonera “did not conduct a sufficiently in-depth analysis into the identity of our local partner in Uzbekistan before we invested in the country or into how this partner came to own the assets that were later obtained by TeliaSonera”, said Nyberg in his 2013 resignation statement.

It was clearly a shock to the whole company. It did not do anything illegal, but was careless in its acquisition of Coscom, which was rebranded to Ucell in 2008.

As a result the CEO left after six years at the top of TeliaSonera and after a long earlier career with Philips and NCR – even though he did not take office until September 2007, two months after TeliaSonera bought a 94% stake in Coscom through its subsidiary Fintur Holdings.

That story clearly makes the new CEO wary of questions about Uzbekistan and corruption. “I was hoping no one would ask about that,” said Dennelind at the TeliaSonera press conference at the start of day two of Mobile World Congress in Barcelona in February 2014.

Nevertheless he agreed to set aside time later in the same day for a one-to-one interview with Global Telecoms Business. What is TeliaSonera doing to ensure that it won’t get caught out again?

“The short answer is that we’re doing a lot,” says Dennelind, who became CEO in September 2013 after three years as international CEO at Vodacom in South Africa, following many years with the Telenor group in Sweden and Malaysia.
More transparent

“It’s part of the history and it’s part of the future. We need to do things in a more thorough way and carry out our transactions in a more transparent manner.”

And it was the Uzbekistan transaction that caused problems for TeliaSonera and Nyberg in 2013.

A report by Swedish Television in September 2012 alleged that TeliaSonera paid $320 million for its Uzbekistan licences through Gayane Avakyan, an Uzbek woman in her late 20s described as having “close ties” to Gulnara Karimova, the daughter of Islam Karimov, who has been president of Uzbekistan since 1991.

Karimov, incidentally, seems to have inherited that position after a spell as first secretary of the Uzbekistan branch of the Communist Party of the Soviet Union followed by a year as president of the Uzbekistan Soviet Socialist Republic. When the USSR broke up and Uzbekistan became independent, he transferred his role into the leadership of the new republic, having won a remarkable 86% of the vote in the 1991 election.

After the allegations emerged, TeliaSonera commissioned Mannheimer Swartling to investigate. When asked by a Swedish radio station in September 2012 what he would do if the allegations were true, Nyberg is reported to have said: “I’d resign, I suppose.”

And he was true to his word. Nyberg resigned immediately after the report criticised the company.

Nyberg said at the time: “The Mannheimer Swartling review criticises TeliaSonera, not least that we did not conduct a sufficiently in-depth analysis into the identity of our local partner in Uzbekistan before we invested in the country or into how this partner came to own the assets that were later obtained by TeliaSonera. Even if this transaction was legal, we should not have gone ahead without learning more about the identity of our counterparty. This is something I regret.”
Guidelines not followed

The law firm told TeliaSonera “that the internal controls were not sufficient to ensure that it did not risk becoming involved in any unethical business, and that thereby the company’s internal ethical guidelines were not followed completely”.

The board concluded that “the investments were not carried out in a satisfactory manner” and added: “In hindsight, it is evident that a more stringent investigation of the counterparties should have been conducted. One consequence of this was that subsequent investments were also not subjected to proper examination. The board concurs with and shares Mannheimer Swartling’s criticism.”

The company’s CFO, Per-Arne Blomquist, took over as acting president and CEO, but he lasted only a few weeks after he went back to being CFO when Dennelind took over. After a further investigation into the group’s business practices, this time by law firm Norton Rose, TeliaSonera fired Blomquist and three other executives.

Christian Luiga is now acting CFO – as he had been earlier in 2013 during Blomquist’s spell as acting CEO.

Clearly the scandal has shaken up TeliaSonera right at the top – though it has to be said that there are few other companies in the world that would take such a rigorous attitude to allegations of this kind. And few C-level executives who would resign in the way that Nyberg did a year ago, for something that had happened before he even took office.

Dennelind is completely untainted by any of the allegations. He has worked for the group before, but a long time ago, when it was simply Swedish incumbent Telia, before its merger in 2002 with Finnish operator Sonera.

TeliaSonera said a year ago it has “started to work with Transparency International Sweden as advisors, with the goal of ensuring that our anti-corruption efforts attain high standards and stand up to a stringent international comparison”.
Non-democratic systems

But the company pointed out at the time that “Sweden exports more than half its GDP. As a country we are entirely dependent on exports to the world’s countries, the majority of which are characterised by non-democratic systems and widespread corruption.”

And now Dennelind says that TeliaSonera is using the opportunity “to look at all of our sustainability issues in the broader sense – not just the anti-corruption issue and not just freedom of expression. We are going through key areas of the sustainability field and embedding that [into the company’s policy].”

The logic is clear: a company’s anti-corruption policy should be regarded as part of its sustainability strategy. “If you don’t do things properly you’re not long-term sustainable and profitable,” he says.

“I think we’ve learned the hard way and we need to come out with the right framework.” And he’s happy to talk about the framework and the values behind them.

“For the framework, we’ve done quite a lot to implement new structures, new frameworks, new policies and new procedures, new functions.” The is “a new structure of the organisation, with new reporting lines and compliance functions, which we didn’t have properly before”, he says.
Culture and leadership

“All of that is a big initiative which we started when I came. At the same time, even more important, is to have the right culture and leadership.”

These are difficult topics, he agrees, “but that needs to come from the top and down”. The company “needs to protect the individuals” who work for it, “so that the individuals, the employees, know what to do in these dilemma situations”, he explains. “Because we are facing difficult dilemmas every day – not just in the difficult markets but also in the more mature markets.”

The company must find a way to talk about these issues, and to train people “to measure, commit, take actions. That’s all part of the leadership culture we are establishing. Having said that, we still have a long way to go.”

But maybe TeliaSonera has come further than most? “We have come a long way, and we have great commitment, from the board and from the management in conducting long-term sustainable, proper business.”

The company “faced the situation where our reputation was dented” and “we just need to be humble about what we are doing about our reputation and we should start by regaining trust”.

This means working day by day “and talking about it openly and showing that we’re serious”, says Dennelind. “An example of this – though in a slightly different area -is freedom of expression. We have a forward-leaning new policy where we lead the industry.” He notes that Vodafone chief Vittorio Colao is also talking about the same sort of issues of transparency.

TeliaSonera’s policy is to take the load off individuals, he says, so they’re not under pressure to make decisions locally. Difficult decisions should be taken further up the system. But at the same time “we have to live by local laws”, he notes, “but if that’s not the way we want to run the business we should say so and we should be open about that.”
Human rights

This strategy is in harmony with that of the Telecommunications Industry Dialogue, a group of operators and vendors that works alongside the Global Network Initiative, set up in 2008 by companies in the information technology and telecoms industries that see themselves facing increasing government pressure to comply with domestic laws and policies in ways that may conflict with human rights of freedom of expression and privacy.

“We also realise that this is not changing overnight. Some of the problems are still there the day after we have introduced our new policy. But the fact that we are bringing this into the open will help – improving the transparency across our footprint.”

And does it also help if corrupt politicians around the world know what TeliaSonera’s policy is on such matters.

“We are a little bit more diplomatic than that,” says Dennelind. “But the message is the same. We shouldn’t be afraid of what we stand for. At the same time we always respect local laws and we will do what is required. It’s important that we know that there is a difference of opinion and that we are driving to change that.”

This means – more diplomatically – that TeliaSonera’s opinion is taken seriously, he says, and the policy leads to constructive dialogues with some governments. The Georgian government, for example, on issues such as data privacy, transparency and freedom of expression. “We encourage that discussion.”

And at that point, with possibly a sigh of relief on both sides, we turn to safer areas. The company is one of the first to come to a deal with streaming music service Spotify – a deal that might set a standard for other operators facing competition from over-the-top players.

“We are being attacked every day every second by players who want to be in our industry,” says Dennelind. “We need to widen our view of how we defend and how we attack. It was easier before to be a telecoms operator. We didn’t have to take account of the adjacencies’ impact.” By “adjacencies”, Dennelind means OTT companies.
New revenue streams

“We were the first to launch a Spotify partnership. Now every operator in every country wants a partnership,” he says. “But many of the partnerships in the pasts were for loyalty, not for new revenue streams. We need to think about new revenue streams.”

Spotify is a Swedish company “and we have a good relationship with them”, says Dennelind. “What we can do is strengthen the proposition when we go to market. It has to be specific, with a local dynamic.”

The deal helped Spotify establish itself in the Swedish market, he says, “and we are looking where to take it next. We want to be more of a partner and a catalyst, and to offer a better experience.”

TeliaSonera is working closely with the Nordic operation of US pay-TV network HBO, he says, “and with other local content players”.

The company is possibly aided in this strategy because “we have been early in data-centric pricing”, he says. That means “free voice, free texts, and you pay for the amount of data you use”.

TeliaSonera’s mobile operators have introduced this policy in Denmark, Norway and Finland, he says. “We are starting to find a formula where we monetise data. In the consumer space in the Nordics it’s paying.”

At the same time “the traditional revenues are going down, so the growth has to be stronger. People are using WhatsApp and Skype – well, the customer has to decide.”

Innovate to be relevant

The “main driver” to succeed in the face of what he calls “adjacencies” is “to stay relevant in the consumer space. If we don’t innovate we don’t stay relevant.”

One of TeliaSonera’s recent successes is Spanish operator Yoigo, which has “close to four million customers and a 7.5% market share, and €1 billion in revenue but only 105 employees”, he says. “The company broke even in four years.” Spain “is a very advanced market in terms of convergence” he says. It is innovating, “and Yoigo is a very well positioned brand to deliver this converged service”.

TeliaSonera’s businesses stretch across Europe, with a focus in the Nordic and Baltic countries and in central Asia, countries such as Azerbaijan, Kazakhstan, Tajikistan and Uzbekistan, plus a small business in Nepal.

“Kazakhstan, Uzbekistan and so on have underlying growth,” he says. “In these markets we are leading or chasing the number one operator. Our margins are 52-53% and we have a fantastic underlying business.”

Kcell, the Kazakhstan operator, sold 25% of its shares on the London and Kazakh stock markets at the end of 2012, but TeliaSonera seems to have no active plans to look at floating other operations.

“We have opportunities to look into adjacencies,” he says, using that word again. “We can do much more. The underlying assets are really, really strong and they’re fantastic markets.”

Which is, no doubt, why he and his colleagues in TeliaSonera will be scrupulous in applying good corporate governance practices in the future. And, in doing so, perhaps be a great example to some other operators around the world.

Karimova Named In Swedish Telecoms Bribery Probe

Gulnara Karimova, the eldest daughter of Uzbek President Islam Karimov, has been named as a suspect in a Swedish telecoms bribery case.

Gunnar Stetler, chief prosecutor at the Swedish National Anticorruption Unit, told RFE/RL’s Uzbek Service that Karimova is suspected of taking bribes to let Nordic telecoms company TeliaSonera enter the Uzbek market.

“We have evidence enough according to our beliefs that Gulnara Karimova is under suspicion for taking part in a bribery case,” Stetler said.

According to prosecutors, TeliaSonera paid 2.3 billion Swedish crowns ($358 million) for a 3G license in Uzbekistan in 2007 to Gibraltar-registered firm Takilant, knowing that the company was a front for Karimova.

“We do think that we, in the end, can show that the money from [TeliaSonera] has been transferred to companies controlled by Gulnara Karimova,” Stetler said.

“That’s our suspicion, and we think we have enough evidence to have that belief, even though we [are searching] for more evidence. We don’t have evidence enough for an indictment, but we have evidence enough to tell the court that we have that suspicion.”

The allegations, first made in a Swedish television program in 2012, have already forced most of the TeliaSonera board, its chief executive, and several senior employees from their jobs.

TeliaSonera said it was cooperating with Swedish prosecutors.

Two weeks ago, prosecutors in Switzerland said their investigations into a money-laundering case had expanded to include Karimova as a suspect in fall 2013. The Swiss prosecutors added then that some 660 million euros ($910,500,000) of suspected Uzbek assets had been seized by Swiss authorities.

Karimova, 41, had been shielded by diplomatic immunity until July, when she was removed from her position as Uzbekistan’s ambassador to the United Nations and other international organizations in Geneva.

Her Uzbek media empire, including several television channels, has been shut down and more than a dozen boutiques selling Western clothes in Tashkent that are believed to belong to her or her business partners have been closed amid allegations of tax evasion and other charges.

In December, a group of exiled Uzbek dissidents broke into Karimova’s villa on the shores of Lake Geneva and published images of items allegedly taken from the Uzbek national museum.

Works of art, gold and silver trinkets, jewelry, and an 18th-century jewel-encrusted Koran were among the items the group filmed in the villa, which Karimova purchased in 2009 for 18 million Swiss francs ($20 million).

Media reports said in February that several of Karimova’s closest associates, including well-known Uzbek businessman Rustam Madumarov — who is believed to be Karimova’s boyfriend — had been arrested in Karimova’s apartment in Tashkent and charged with forgery, illegal business activities, money laundering, tax evasion, and illegal export of hard currency in large amounts.

Meanwhile, RFE/RL’s Uzbek Service and the BBC say they have obtained copies of a handwritten letter believed to be from Karimova in which she says she is under house arrest in Tashkent, under “severe psychological pressure,” and has been beaten. The author says, “You can count the bruises on my arms.”

The letter is unsigned, but all indications — including the level of detail and insight and the similarity to known examples of her handwriting — point to Karimova as the author.

The author describes daily life under house arrest, saying, “It is impossible to live like a human when you are watched by cameras, when there are armed men everywhere and when you are depressed because of what you have seen.”

The letter goes on: “I never thought this could happen in a civilized, developing nation that Uzbekistan portrays itself as. But a closer look showed me all the ugliness of what goes on here, and listening to people whom I would argue with before, I realize that all of it has been happening for a long time.”

She appears to criticize her father, President Islam Karimov, saying he has “betrayed his own children” and “destroyed his own grandchildren” and questioning his ability to rule. But she said “many witnesses can confirm that I always unconditionally respected and sincerely loved my father.”

Uzbek president’s daughter named in Swedish telecom bribery case

* Gulnara Karimova already named by Swiss authorities

* Bribery allegations forced board changes at TeliaSonera

* Dutch, Swiss, U.S. also investigating Uzbek case

STOCKHOLM, March 24 (Reuters) – Swedish prosecutors are investigating the daughter of Uzbekistan’s president on suspicion of taking bribes to let Nordic telecoms company TeliaSonera enter the country’s market, they said on Monday.

Gulnara Karimova, daughter of President Islam Karimov, had already been named by the Swiss public prosecutor as a suspect in the case which is also being investigated by Dutch and U.S. authorities .

Prosecutors are looking into allegations that when TeliaSonera paid 2.3 billion Swedish crowns ($358 million) for a 3G licence in Uzbekistan in 2007 to Gibraltar-registered firm Takilant, it knew the company was a front for Karimova.

The allegations, first made in a Swedish television programme in 2012, have already forced most of the TeliaSonera board, its chief executive and several senior employees from their jobs.

In a request to a Stockholm court asking for more time to bring charges, Swedish prosecutors said they suspected that representatives for TeliaSonera had bribed members of Uzbekistan’s “political elite”.

“In the investigation there is now a concrete basis, including information on control over assets, which gives reason to suspect that Gulnara Karimova, who also served as a public official during the time period relevant for the case, was the one who orchestrated, controlled, and also was the one who primarily benefited from the procedure,” the prosecutors said.

Reuters was unable to contact Karimova for comment. She has in the past denied allegations of business impropriety.

TeliaSonera, which has appointed its own lawyers to investigate its past business deals in Uzbekistan and other countries in the region, said it was collaborating with the prosecutors.

Uzbekistan’s ambassador to the United Nations in Geneva from December 2008 until last year, 41-year-old Karimova is also a jewellery designer and pop singer whose stage name is “Googosha”.

Russian telecoms companies have also run into problems in Uzbekistan. Russia’s top mobile operator, MTS, had its assets in the country confiscated in 2012 in what it called a “classic shakedown” of foreign investors.

Rival mobile operator Vimpelcom is under investigation by the U.S. Securities and Exchange Commission (SEC) and Dutch authorities over its business there, it said this month.


Gib company linked to Uzbekistan probe

Russia’s top mobile-phone operator, MTS, said this week that U.S. financial regulators had asked for its cooperation in an investigation of the Uzbek telecoms market. In a probe also linked to the Uzbec market a Gibraltar-based company figures in an inquiry by Swedish prosecutors.

MTS said the Securities and Exchange Commission in the United States had asked for “documents and information” related to its business in Uzbekistan, from which MTS was ousted in 2012. The SEC inquiry concerned “investigations into the activities of unaffiliated parties,” MTS said.

International scrutiny of Uzbekistan has been growing, with the SEC investigating the operations of MTS’s rival Vimpelcom and Sweden’s TeliaSonera in the central Asian state. Swedish, Dutch and Swiss authorities are investigating alleged bribery and money laundering. The Swiss are also looking into Gulnara Karimova, the daughter of Uzbekistan’s president.

Vimpelcom said last week it was being investigated by SEC and Dutch authorities, apparently over operations in Uzbekistan. It had warned about possible investigations in 2012, because of its relationship with Takilant Ltd.

Takilant, a Gibraltar-based company, figures in a inquiry by Swedish prosecutors into allegations of corruption related to TeliaSonera’s purchase of a 3G licence in Uzbekistan in 2007. On Monday, TeliaSonera said the investigations had widened to include the U.S. Department of Justice and SEC.

U.S. authorities join probe into potential TeliaSonera corruption

The U.S. government’s increased focus on foreign bribery in 2014 has a new target in its sights: Swedish telecommunications company TeliaSonera AB.

The U.S. Department of Justice and Securities and Exchange Commission have opened investigations into TeliaSonera’s dealings in Uzbekistan, the company announced on March 17. The U.S. government joins an ongoing investigation from Swiss, Swedish, and Dutch authorities.

In 2007, TeliaSonera acquired an Uzbekistan wireless data license and spectrum frequency. The deal was done in conjunction with a Gibraltar-based holding company that allegedly has ties to Uzbekistan’s leadership. In 2012, a Swedish television show revealed potential corruption in the acquisitions, sparking multiple investigations.

TeliaSonera claims that the company breached its own internal ethical guidelines in the deal, but it says that it did not break any laws. According to the Wall Street Journal, former CEO Lars Nyberg resigned from his position following the scandal’s outbreak, and many other high-ranking TeliaSonera officials have stepped down from their posts.

In addition to possible bribery charges, governmental authorities are also investigating possible money laundering. Dutch authorities are investigating two of TeliaSonera’s holding companies for the crime, and TeliaSonera said the Dutch government has requested between €10 million ($13.9 million) and €20 million worth of collateral for any future claims.

Already in 2014, Mead Johnson Co., NCR Corp. and Avon Products Inc. have come under governmental scrutiny for alleged foreign bribery. In another case, aluminum giant Alcoa paid $384 million for Foreign Corrupt Practices Act violations in its dealings with the government of Bahrain.

Seeing this trend, companies and governments have both begun to bolster anti-bribery protections. New strategies and technologies are being implemented that can keep anti-bribery controls strong while limiting spending. Meanwhile Chinese Premier Li Keqiang recently laid out a new anti-corruption strategy within China that intends to increase transparency in business dealings.

TeliaSonera says U.S. Dept of Justice investigating its investment in Uzbekistan

(Reuters) – Telecoms company TeliaSonera said on Monday the United States Department of Justice is investigating its purchase of a 3G licence in Uzbekistan in 2007.

“The Department of Justice has sent a request to TeliaSonera to hand over documents,” Telia said in a statement.

“Furthermore, Telia has also received a request from the U.S. Securities and Exchange Commission to … hand over documents to the SEC related to Uzbekistan.”

In Sweden, prosecutors are looking into allegations of corruption related to Telia’s 2.3 billion Swedish crowns ($360.5 million) purchase of a 3G licence in Uzbekistan.

Telia said it was cooperating with all authorities in the matter. ($1 = 6.3803 Swedish Crowns) (Reporting by Simon Johnson)


Uzbekistan: TeliaSonera Targeted by US Corruption Probe

Hot on the news that Gulnara Karimova, daughter of Uzbekistan’s strongman president Islam Karimov, is a formal suspect in a Swiss money-laundering investigation, embattled Nordic telecommunications giant TeliaSonera has become the target of a related corruption probe in the United States.
“TeliaSonera has been informed that the U.S. Department of Justice (DOJ) has an ongoing investigation regarding TeliaSonera’s transactions in Uzbekistan,” the company said in a March 17 statement. “The DOJ has sent a request for documents to TeliaSonera. In addition, TeliaSonera has received a request from the U.S. Securities and Exchange Commission (SEC) to submit documents and information related to Uzbekistan.”
The company made the announcement five days after revealing that two of its daughter companies, TeliaSonera UTA Holding B.V. and TeliaSonera Uzbek Telecom Holding B.V (the holders of TeliaSonera’s operations in Uzbekistan, where it operates the Ucell brand), are under investigation in The Netherlands in a bribery and money-laundering case.
“Dutch authorities have requested collateral for any financial claims which may be decided against TeliaSonera UTA Holding BV,” TeliaSonera said on March 17, adding that the request for collateral stands at 10-20 million euros.
“The common denominator for our contacts with the authorities is that we are asked for information about TeliaSonera’s investments in Uzbekistan and documents related to these,” the statement quoted Peter Borsos, Head of Group Communications, as saying. “TeliaSonera cooperates fully with all the authorities, as we are doing with the Swedish prosecutor, in order to gain full clarity on these issues.”
Another firm active on Uzbekistan’s telecoms market, Russia’s VimpelCom (operator of the Beeline brand) is also under investigation by the US Securities and Exchange Commission and Dutch authorities over its Uzbekistan operations, it said on March 12.
TeliaSonera is under investigation in Sweden over payments of $330 million it made to a small offshore company called Takilant Limited, run by Karimova associate Gayane Avakyan, to purchase 3G licenses in Uzbekistan when it entered the market in 2007. The Nordic firm acknowledges making the payments but denies any wrongdoing in the affair, which has sparked the resignation of its CEO and the dismissal of four senior executives.
On March 12 Switzerland’s Office of the Attorney General (OAG) announced that it is investigating Karimova on suspicion of money laundering. A sum of over 800m Swiss francs ($911m) has been frozen in the case, and investigators are believed to be working on the theory that the funds include some of the millions paid by TeliaSonera for 3G licenses in Uzbekistan.
Karimova is under heavy pressure in Uzbekistan, where her associates, including Avakyan, were summoned for questioning by prosecutors last month as part of a criminal investigation into tax evasion and concealing foreign currency.
Karimova has been engaged in a bitter feud since last fall with her sister, Lola Karimova-Tillyaeva, and Rustam Inoyatov, the head of Uzbekistan’s SNB domestic intelligence service. She has used Twitter to fight her corner, but her Twitter account has been silent for over three weeks, while another account tweeting in her support, called Free Gulnara (SOS), has said that she is being held under house arrest.
“Today, [it is] a month since Gulnara and her 15 year old daughter, a US citizen[,] are kept under house arrest incommunicado by the SNB & [Karimova’s mother] Tatyana Karimova,” the account tweeted on March 17, after a two-week silence.
“Their [Karimova’s enemies] fear of exposure, for their multi-billion financial dealings, as well as manipulation of Islam Karimov, drives them to mad lengths,” it said in another tweet.

TeliaSonera second operator to face Dutch probe into Uzbekistan business

TeliaSonera became the second operator this week to be probed by Dutch authorities over its business in Uzbekistan.

The Sweden-based company confirmed Dutch prosecutors visited the offices of two of its Netherlands-based holding companies on Tuesday, in the first stage of an investigation into bribery and money laundering.

TeliaSonera explained in a statement that its UCell operation in Uzbekistan is one of the businesses handled by the holding companies, TeliaSonera UTA Holding and TeliaSonera Uzbek Telecom Holding.

“The Dutch authorities carried out searches at the companies during on [sic] March 11 to obtain access to documents. TeliaSonera is cooperating fully with the Dutch authorities,” the company statement explained.

TeliaSonera’s words on cooperation echo those of VimpelCom, which was visited by the Dutch Public Prosecutor’s Office on Tuesday and also had documents seized as part of a criminal investigation. VimpelCom stated the visit related to its business in Uzbekistan, and said the U.S. Securities and Exchange Commission (SEC) was also seeking access to documents as part of a probe.

Although neither operator has commented on the specifics of the Dutch investigations, the probes appear to be linked to TeliaSonera and VimpelCom’s acquisition of operating licences in Uzbekistan.

An investigation by TV reporters into TeliaSonera in 2012 alleging the company paid money to a company controlled by a close friend of the daughter of Uzbekistan’s President, Islam Karimov, prompted a formal investigation by Swedish prosecutors. That probe focused on whether the company knew, or should have known, that money paid to Gibraltar-based Takilant for a 3G licence was effectively a bribe to the President’s family.

The scandal claimed the head of TeliaSonera’s CEO, Lars Nyberg, who stepped down in February 2013. At the time, Nyberg said he regretted not “learning more about the identity of our counterparty” before proceeding with the transaction.

Four more TeliaSonera executives–among them the operator’s CFO Per-Arne Blomquist–were subsequently fired after the company extended its investigation to include other markets in its Eurasia operations. TeliaSonera also turned the findings of its probe over to Swedish prosecutors.

The Dutch investigation rounds out a bad week for TeliaSonera, which on Monday confirmed its Kcell unit in Kazakhstan had lost a court case relating to claims by the country’s Agency for Competition Protection that the company abused its dominant position in Kazakhstan, and so violated customers’ rights.

Netherlands initiates investigation against TeliaSonera associated with corruption scandal in Uzbekistan

Law enforcement agencies of the Netherlands initiated a preliminary investigation against two TeliaSonera’s Dutch companies – TeliaSonera UTA Holding B.V. and TeliaSonera Uzbek Telecom Holding B.V., ITAR-TASS reported on March 12 referring to TeliaSonera.

Reportedly, the investigation is related to corruption and money laundering. Other details were not disclosed.

VimpelCom Slides as Carrier Faces Probe Over Uzbek Business

VimpelCom Ltd. (VIP) is facing criminal investigation over its Uzbek business a year after the carrier warned investors about its relationship with Takilant Ltd., a company that is the focus of a corruption probe at Swedish rival TeliaSonera AB. (TLSN) The stock fell to a 19-month low.

VimpelCom’s headquarters in Amsterdam were raided yesterday by Dutch prosecutors. The operator, controlled by billionaire Mikhail Fridman, said in a statement the U.S. Securities and Exchange Commission demanded documents as part of the probe into the Russian company’s business.

In a separate statement, TeliaSonera said authorities yesterday searched premises of two of its Dutch holding companies, which are subject to preliminary investigation concerning bribery and money laundering. The Dutch units include the Uzbekistan operations, Stockholm-based TeliaSonera said, adding that it’s fully cooperating with the authorities.

Takilant, a company with ties to President Islam Karimov, held a minority interest in VimpelCom’s business in Uzbekistan from 2007 to 2009. VimpelCom “worked with Takilant in the past” to acquire frequency in Uzbekistan, the Russian carrier said in an SEC filing last year. In 2012, Takilant was targeted by Swedish prosecutors in a probe into whether TeliaSonera knew, or should have known, that its license money went to Karimov’s family.

‘Fully Cooperating’

“We welcome this investigation to clarify matters surrounding our operations in Uzbekistan and we will fully cooperate with the investigation,” Bobby Leach, a spokesman for VimpelCom, said by telephone. Norway’s Telenor ASA (TEL) owns 33 percent of VimpelCom.

VimpelCom shares fell as much as 6.3 percent to $8.29 in New York, the lowest intraday level since July 31, 2012. It traded 2.9 percent lower at $8.59 as of 12:15 p.m. local time, valuing the company at $15.1 billion. TeliaSonera traded 0.2 percent lower at 48.29 kronor on the Stockholm exchange.

VimpelCom entered Uzbekistan in 2006 by acquiring Buztel and Unitel, two local operators, for about $260 million. Last year, VimpelCom received $676 million in revenue from the country, or about 3 percent of its total sales, according to the company’s earnings report. It had 10.5 million wireless customers in the country at the end of 2013.

Nyberg’s Resignation

“A criminal investigation has been started and the public prosecutor’s office visited VimpelCom’s headquarters yesterday,” Dickey Gardenier, a spokeswoman for the Dutch prosecutors, said by telephone today. She declined to comment further on the raid.

VimpelCom told investors last year it couldn’t be sure the company wouldn’t “become subject to investigations, face liability or suffer reputational harm” due to it relationship with Takilant.

TeliaSonera Chief Executive Officer Lars Nyberg resigned last year after a law firm hired to investigate graft accusations said TeliaSonera should have been more careful when it bought its Uzbek phone license.

TeliaSonera bought Uzbek mobile operator Ucell, a small company with half a million subscribers, in 2007. At the time of purchase, it agreed to buy a third-generation operating license and frequencies from Takilant for $30 million, as well as the Gibraltar-based company’s 26 percent stake in Ucell, as a “prerequisite” for entering the market, according to TeliaSonera’s website.

VimpelCom last week reported a fourth-quarter net loss of $2.66 billion after writing down its Ukraine assets by $2.1 billion because of the country’s political turmoil. The operator is struggling to cut its $27.5 billion debt pile, the result of an acquisition of assets in Italy, Algeria and Asia.