Telia to Pay $1.4 Billion in Bribery Probe
September 15 2016 - 04:50AM
Dow Jones News
STOCKHOLM—Nordic telecommunications operator Telia Company AB
will have to pay $1.4 billion to settle U.S. and Dutch
investigations into deals the company made in Uzbekistan in 2007,
it said Thursday.
Telia, which is 37.3%-owned by the Swedish state, has been
planning to pull out of seven Eurasian countries, including
Uzbekistan, where its operations have come under scrutiny on
suspicion the company to paid hundreds of millions of dollars in
bribes to secure business in the former Soviet country.
Telia has previously said an internal investigation had found
the company had broken its own ethical rules but didn't breach any
laws.
"I have said on many occasions in the past that Telia Company's
entry into Uzbekistan was done in an unethical and wrongful way and
we are prepared to take full responsibility," said Telia chairman
Marie Ehrling.
"We are cooperating fully with the authorities to bring clarity
to the matter. With that said, our initial reaction to the proposal
is that the amount is very high. We will now have to analyze the
information and decide on how to proceed with the continuing
discussions with the authorities."
The company said last year that it would pull out of Azerbaijan,
Kazakhstan, Georgia, Moldova, Tajikistan and Nepal—countries where
it is entangled in various disputes with partners or local
authorities—to focus on the Nordic and Baltic region.
Once seen as a new frontier for expansion and profit, Uzbekistan
has become a source of financial and judicial concerns for
Telia.
U.S. and Swedish prosecutors believe the company paid hundreds
of millions of dollars in bribes to Gulnara Karimova, the elder
daughter of Uzbek President Islam Karimov, in an effort to secure
telecom licenses in that country, people with direct knowledge of
the matter have said.
While U.S. and Swedish authorities believe Ms. Karimova
illegally collected payments from Telia, the company has said it
still doesn't know who was the ultimate beneficiary of money it
paid for wireless licenses and other assets in Uzbekistan.
The bribery accusations first surfaced in 2012, when Swiss
authorities detained associates of Ms. Karimova, and Swedish
reporters broadcast an investigative report about Telia's
activities in Uzbekistan. The ensuing scandal led the company to
reshuffle its top management, including its chief executive and
chief financial officer.
Pulling out of Azerbaijan was complicated by the company's
prolonged dispute with partners in Turkcell, one of the holding
companies through which it controlled its Azeri business.
When it announced plans to quit the region, Telia's Eurasian
businesses had total book value of 20 billion Swedish kronor ($2.35
billion), the CEO said at the time.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
September 15, 2016 04:35 ET (08:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Turkcell lletism Hizmetl... (NYSE:TKC)
Historical Stock Chart
From Feb 2024 to Mar 2024
Turkcell lletism Hizmetl... (NYSE:TKC)
Historical Stock Chart
From Mar 2023 to Mar 2024