Monthly Archives: November 2014

Norway Summons Telenor to Explain VimpelCom’s Uzbek Payments

Norway’s government summoned the chairman of Telenor ASA (TEL) to explain reports alleging that VimpelCom Ltd. (VIP:US) paid bribes to gain business in Uzbekistan.

Industry Minister Monica Maeland called Telenor Chairman Svein Aaser in for a meeting today to explain the payments, ministry spokesman Trond Viken said by phone. The government owns about 54 percent of Telenor, which in turn holds 33 percent of the Russian phone carrier.

A report last week by newspaper Klassekampen, which cited information from Swedish prosecutors, rekindled concerns over VimpelCom’s relationship with Takilant Ltd., a company that has also been the focus of a corruption probe at TeliaSonera AB. (TLSN)

In response to a request by Dutch authorities, Swedish prosecutors said in a Nov. 10 document that payments totaling $55 million in 2007 and 2011 from VimpelCom to Takilant are suspected to be “bribes” to Uzbek authorities that were “fully or partially transferred to a Swiss account.”

VimpelCom, whose Amsterdam headquarters were raided in March by Dutch prosecutors, said this recent report doesn’t “provide any new information” to what has been disclosed in financial statements and to regulators.

“The company continues to cooperate with the pending investigations, and it continues to focus its energies on improving its compliance program,” Artem Minaev, head of media relations, said in an e-mail today.

Raised Questions

Telenor has “raised questions toward the company as a shareholder and in investor meetings” and “will continue to do so,” Meera Bhatia, a Telenor spokeswoman, said in an e-mail.

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

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.


Uzbekistan: Second Nordic Telecom Dogged by Gulnara-Linked Bribery Claims

Fresh allegations have emerged of bribery in Uzbekistan’s telecoms market involving another Nordic company and Gulnara Karimova, the daughter of President Islam Karimov.

A cellphone company partly owned by Norway’s Telenor is alleged to have paid some $25 million in kickbacks to acquire telecoms licenses in Uzbekistan, AFP reports, citing the Klassekampen daily.

The funds were reportedly transferred from Amsterdam-headquartered Vimpelcom, the operator of the Beeline brand in Uzbekistan, to the infamous Takilant Limited company, which is at the heart of two separate graft probes in Europe. Takilant is involved in a money-laundering probe in Switzerland (in which Karimova is a suspect), and also a bribery probe in Sweden involving another Nordic telecoms giant, TeliaSonera.

“Bank statements document how the money was transferred from a previously unknown company in the British Virgin Islands as Vimpelcom purchased licenses to the mobile market in the former Soviet state,” AFP quoted Klassekampen as saying.

Telenor responded that it has “zero tolerance for corruption, both when it comes to our own operations and also to the companies that we are part owners in.”

“We are a minority shareholder in Vimpelcom, so it’s up to Vimpelcom to take responsibility for answering any questions that relate to their operations,” Telenor communications head Glenn Mandelid told AFP.

Vimpelcom, which is 33 percent owned by Telenor, told by email that there is nothing new in the information that has emerged.

“These recent reports actually do not provide any new information to what the company has already disclosed in its financial statements and to regulators,” it said. “The company continues to cooperate with the pending investigations, and it continues to focus its energies on improving its compliance program.”

The corruption allegations surrounding the other Nordic telecoms firm, TeliaSonera, center on payments of $330 million it made to Takilant Limited to purchase 3G licenses in Uzbekistan when it entered the market in 2007.

TeliaSonera, which is also under investigation in the United States and The Netherlands, has denied criminal wrongdoing but has admitted that “some transactions have not been in line with sound business practices.”

Takilant is owned by Karimova associate Gayane Avakyan, who was convicted on corruption charges in Uzbekistan in May, along with Rustam Madumarov (who is believed to be Karimova’s partner). Their current whereabouts are unknown.

Karimova herself is believed to be under house arrest in Tashkent, where prosecutors are probing her alleged involvement in a multi-million-dollar mafia-style corruption case. She denies wrongdoing and says the case against her is political.

Karimova’s downfall earlier this year followed a high-profile family feud in which she has accused her mother, Tatyana Karimova, and estranged younger sister, Lola Karimova-Tillyaeva, of turning the president against her. She has also charged that Rustam Inoyatov, the powerful head of the domestic intelligence service (the SNB), is undermining her in a bid to enhance his own political fortunes.