Scandinavian Telecoms Boss Quits After Audit of Uzbek Deal

MOSCOW, February 1 (RIA Novosti) – The CEO of Swedish-Finnish telecoms giant TeliaSonera, Lars Nyberg, stepped down Friday after the company received an independent audit report saying it should have been more careful in buying licenses in Uzbekistan in 2007, TeliaSonera said.

Last fall, Swedish investigators opened a probe into the company after local television journalists aired allegations of improper payments in exchange for 3G mobile network licenses in the Central Asian country. The report on Swedish state broadcaster SVT claimed TeliaSonera had paid its Uzbek partner, Takilant, the equivalent of 2.2 billion Swedish kroner ($349 million at today’s rates, less at the time) that were not properly reflected in public records. The principal figure at Takilant, described by SVT as a one-woman company registered in Gibraltar, is believed to be an associate of Gulnara Karimova, the socialite daughter of Uzbek President Islam Karimov.

Both TeliaSonera and the Uzbek license-issuing agency have denied wrongdoing; Karimova has not commented publicly on the allegations.

The audit, carried out by Swedish law firm Mannheimer Swartling, did not confirm or deny wrongdoing by TeliaSonera, but criticized the company for its acquisition. In particular, the audit “directs serious criticism at TeliaSonera for shortcomings in the investment process and concludes that not enough effort was made to investigate either the local partner in Uzbekistan or how the local partner could hold the rights which were later transferred,” according to a statement by the TeliaSonera board of directors.

“Mannheimer Swartling says 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 said.

Nyberg said in a statement on the company’s website: “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.”

TeliaSonara, now the fifth-largest telecoms company in Europe, was formed in 2002 by a merger of Finnish and Swedish mobile operators Sonera and Telia. The company, based in Stockholm, has a presence on the Baltic, Eurasian, north European, Spanish and Turkish markets.

Other foreign telecoms majors have also experienced difficulties in Uzbekistan, ranked 170th of 176 countries in Transparency International’s 2012 Corruption Perceptions Index. Last summer, the national Communications and Information Technology Agency suspended the licenses of the largest local operator, Uzdunrobit, a daughter company of Russian telecoms giant MTS, for what it said where “repeated and systematic gross violations, and also for failure to comply with the regulator’s directions.”

MTS denied those allegations and described the action as “an unwarranted attack on its subsidiary in Uzbekistan.”

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