VimpelCom Bribery Investigations Spark Telenor Review
November 05 2015 - 9:10PM
Dow Jones News
OSLO—Norway's Telenor ASA sought to control damage from bribery
allegations engulfing its 33%-owned affiliate VimpelCom on
Thursday, as Norwegian prosecutors detained a former VimpelCom
chief executive and launched their own corruption probe into that
company.
VimpelCom, Russia's third-biggest telecommunications operator,
is currently the focus of U.S. and Dutch investigations into
alleged corruption related to its operations in Uzbekistan.
Telenor said it has hired a law firm to review how it has
handled its VimpelCom ownership and representatives' actions at the
U.S.-listed company over the past 10 years, especially when it
expanded in Uzbekistan.
Telenor, which earlier this week said the U.S. and Dutch probes
in Amsterdam-based VimpelCom could complicate its plan to sell its
stake, declined to comment on the Norwegian investigation.
The latest probe opens a new front in what has become an
intertwined set of investigations already involving U.S., Dutch and
Swiss authorities. In addition to VimpelCom, U.S. bribery probes of
companies doing business in Uzbekistan are targeting TeliaSonera AB
of Sweden and Russia's Mobile TeleSystems PJSC. U.S. prosecutors
are seeking to seize hundreds of millions of dollars in assets they
regard as bribes paid by the three companies to secure business in
Uzbekistan, according to U.S. court documents.
VimpelCom, which on Tuesday said it had set aside $900 million
to accommodate possible losses related to the investigations,
declined to comment on the Norwegian probe. The company said it was
fully cooperating with U.S. and Dutch authorities.
TeliaSonera said it wasn't possible to assess when or how the
probes will be resolved. The company said it doesn't rule out that
certain transactions related to its activities in Uzbekistan have
been in violation of the law. Mobile TeleSystems declined to
comment on the corruption allegations but said it was cooperating
with judicial authorities.
As part of Thursday's developments, Norwegian prosecutors said
they were detaining and questioning Jo Lunder, a former VimpelCom
CEO, on suspicions of corruption related to the telecommunications
company's operations in Uzbekistan.
Mr. Lunder, a Norwegian citizen who was chief executive of
VimpelCom from 2011 to April 2015, was detained at the Oslo airport
on Wednesday, according to Norway's chief public prosecutor,
Marianne Djupesland.
Ms. Djupesland confirmed Norway's decision to launch its own
probe but declined to provide details.
A lawyer for Mr. Lunder, Cato Schiotz, told Norwegian radio that
his client was questioned for several hours about a $30 million
money transfer in 2011, made only two months after he took the helm
at the company.
The lawyer said Mr. Lunder denied any wrongdoing. He said police
intended to keep his client in temporary custody, something he
would challenge in court on Friday. Norwegian police couldn't be
reached for comment.
Mr. Lunder is currently CEO of the Fredriksen Group, which
manages the holdings of billionaire John Fredriksen.
The Fredriksen Group couldn't immediately be reached for
comment.
The sprawling corruption allegations have sparked a debate
within Norway's government and parliament over how much current and
former executives at the majority state-run company knew about
alleged wrongdoing at VimpelCom. Last week, Telenor's chairman
resigned amid disagreement with the government.
Across the Atlantic, U.S. law firm Pomerantz LLP filed a suit
against VimpelCom in New York late Wednesday, saying it aimed to
have the complaint certified as a class action. Pomerantz accused
the telecom operator of misleading shareholders by failing to
disclose alleged bribery payments.
"We won't comment on specific litigation but to be clear, we
will zealously defend against these sorts of opportunistic
actions," VimpelCom said in a statement.
Telenor declined to comment on the Pomerantz suit.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com and David Gauthier-Villars at
David.Gauthier-Villars@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 05, 2015 20:55 ET (01:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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