Monthly Archives: March 2015

TeliaSonera says whistleblowing scheme has exposed potential corruption

TeliaSonera said its ‘Speak-Up Line’ – an innovative scheme introduced last year to encourage employees to flag wrongdoing – helped uncover “potentially fraudulent transactions” involving former senior level employees at Kcell, its Kazakhstan subsidiary.

TeliaSonera admitted last year it may have broken laws in various Eurasian countries, so is naturally keen to show willingness about weeding out corruption. The confidential Speak-Up Line system is one way of demonstrating that.

The Nordic operator says 92 cases were reported last year through the whistleblowing scheme, and related to a wide variety of suspected incidents, including “conflicts of interest, corruption, embezzlement, procurement fraud and HR matters”.

As well as the Kcell investigation, other results from the whistleblowing scheme involve “disciplinary actions taken concerning seven employees in four business units following investigations into breaches of the Code of Ethics and Conduct.”

Also, the operator said “several third party relationships have been reviewed and cancelled following findings that contracts had been entered in breach of standard procurement processes, possibly to support embezzlement of funds.” TeliaSonera stressed that it is now focusing on reviewing its third party relationships across the organisation and strengthening procurement processes to prevent such breaches.

“It’s very encouraging to see that our employees react against unethical behaviour and dare to raise issues though the Speak-Up Line,” said Michaela Ahlberg, chief ethics and compliance officer for the Scandinavian operator.

“We realise that providing the Speak-Up Line is not enough on its own, employees and stakeholders need to trust the system to submit the report. We are continuously raising awareness and are transparent in our communication to maintain the highest level of trust in the organisation.”

Swedish TeliaSonera helps Lukashenka to block websites

A subsidiary company of TeliaSonera (Sweden) in Belarus, Best closed joint-stock company, is blocking access to independent websites.

It is written by the leader of Swedish human rights organisation Östgruppen, Martin Uggla in his blog.

Best closed joint stock company, which is Life mobile phone service provider, has blocked access to a number of independent websites to its subscribers. Clients of the company cannot access, Belorusskiy partizan, the website of Viasna human rights centre, Martin Uggla writes.

The human rights defender stresses that clients who would try to enter addresses of these websites, receive messages that access to them is impossible under Decree No.60 signed by Alyaksandr Lukashenka.

Life mobile operator is owned by Best company, which in its turn is controlled by a Turkish firm Turkcell. TeliaSonera owns 38% of shares of the latter. Swedish state owns more than 37% of shares of TeliaSonera.

“In practice it means that the Swedish government and TeliaSonera are indirectly encouraging perpetration of crimes against freedom of expression, committed by Lukashenka’s regime. Such things are happening not for the first time. The former Swedish Minister for Financial Markets Peter Erik Norman once harshly criticized TeliaSonera, demanding the company to show greater respect to human rights in its activities. The question is, how the current government is going to act,” Martin Uggla concluded.

We remind that a few days ago Belarusian Internet providers received a list of websites to be blocked, which is to be applied to all users in the country. The new list is based on the previous blacklist prepared by the State Supervisory Department for Telecommunication, which, among others, includes independent news websites Charter’97 and Belorusskiy Partizan. Earlier, the blacklisted sites were blocked for state-owned organisations, educational and cultural institutions, but now access will be restricted for all Internet users in Belarus.

Uzbekistan’s first daughter accused of pocketing $1bn in phone deals

Investigation claims Gulnara Karimova took bribes in return for access to lucrative telecommunications market.

Gulnara Karimova
Gulnara Karimova is under investigation for a multitude of corruption charges. Photograph: Yves Forestier/Getty Images

Gulnara Karimova, the estranged daughter of Uzbekistan’s strongman leader Islam Karimov, is facing fresh allegations of corruption after an investigation accused her of accepting more than $1bn from telecoms companies wanting a slice of the lucrative mobile phone industry.

The Organised Crime and Corruption Reporting Project (Occrp), run by a group of investigative journalists, reported this week that Karimova had received the money in payments and shares from Scandinavian and Russian telecoms companies including TeliaSonera, Telenor, MTS, and Alfa Telecom

Occrp described her schemes as “audacious” accusing them of diverting money from Uzbekistan’s national coffers in to banks, an offshore hedge fund and luxurious real estate around the world.”

The investigators accuse Karimova of demanding percentages of companies and extorting cash for her “personal services and lobbying efforts”.

Karimova “demonstrated a ruthless ability to acquire a share of ownership (her preferred rate was 26%) of lucrative telecom-related companies – without actually putting up any money,” they said.

Investigators say they have evidence that that Nordic telecoms giant TeliaSonera paid Karimova $381m and promised another $75m to order to start trading in Uzbekistan’s cellphone market. Russian company MTS is reported to have paid $350m, with VimpelCom, a joint venture between Russia’s Alfa Telecom and Norway’s Telenor, said to have spent $176m.

Occrp say that the data was compiled using an external review of TeliaSonera conducted by law firm Mannheimer Swartling; a Dutch request for legal assistance; data from the US Securities and Exchange Commission; and other financial documents.

Allegations of mass corruption involving Karimova and the telecoms sector surfaced in 2012, when TeliaSonera was accused of shelling out $330m in suspicious payments for the rights to operate in Uzbekistan. That sparked a corruption probe in Sweden, which is linked to a money-laundering investigation in Switzerland in which Karimova is a formal suspect.

TeliaSonera, also under investigation in the United States and the Netherlands, denies allegations of bribery and money-laundering, but has acknowledged that “the processes for conducting some transactions have not been in line with sound business practices”.

The Russian companies MTS, VimpelCom, and Alfa Telecom also deny any wrongdoing. Norway’s Telenor, which is being probed in Switzerland, the Netherlands and the United States over allegations it made “unlawful payments” of $55m in Uzbekistan, also denies bribery, and claiming they have “zero tolerance for corruption”.

Karimova is also under investigation in Uzbekistan on charges of corruption. It was reported in September 2014 that she could face a lengthly prison spell but there has been no movement on the case since.

Karimova has always denied any wrongdoing, claiming the charges against her are politically motivated. She has been under house arrest in since February 2014 and has not been seen for months.

PTS to watch TeliaSonera more closely in 2015

Swedish postal and telecoms regulator PTS said it has set out its plan for competition monitoring in 2015. It will give greater priority to ensuring that TeliaSonera does not discriminate aganst other operators, using new regulations. The watchdog said it is now placing all the markets that are subject to ex-ante regulation under the same plan, in order to improve transparency.

The new obligations mean that market 3a, for local access, has heightened requirements for dominant player TeliaSonera to avoid discriminating against competitors. Equivalence of Input (EoI) will be an important part of supervision. New regulations requiring it to offer duct access and virtual access to the copper grid will also get priority this year. The oversight plan will be followed up every six months and is subject to revision.