Telenor bosses to stay silent in Norwegian probe of subsidiary VimpelCom

Telenor CEO Jon Fredrik Baksaas and company chairman Svein Aaser pledged to remain tight lipped when quizzed by Norwegian politicians this week regarding alleged corruption at subsidiary VimpelCom.

Jon-Fredrik Baksaas, Telenor president and CEO

Jon Fredrik Baksaas, Telenor president and CEO

The pair are due to meet politicians on Norway's Control Committee on Wednesday to discuss allegations that VimpelCom effectively paid a bribe of $600 million (€508 million) to secure its Uzbekistan operating licence.

In a letter to the committee, Baksaas and Aaser argue that revealing details of VimpelCom's dealings would break Telenor's internal confidentiality rules, which cover all information regarding the Netherlands-based subsidiary that has not already been made public, local news site E24 reported.

The pair said they would remain silent on non-public information even if the Control Committee meeting takes place behind closed doors rather than being open to the public, E24 added.

Baksaas and Aaser's stance could now scupper the Norwegian investigation. Committee chair Martin Kolberg said an extraordinary meeting will be held on Monday to decide whether to go ahead with Wednesday meeting, the news site noted.

Telenor told E24 that, as a minority VimpelCom stakeholder, it only has access to the same public information as anyone else. "Telenor has no access to confidential information in VimpelCom, and we therefore cannot account for this committee," a statement sent to the news site explained (translated using Google Translate).

Baksaas last month stepped down from VimpelCom's supervisory board, appointing Kjell Morten Johnsen in his place. Telenor holds a 33 per cent stake in VimpelCom, and 43 per cent of voting rights.

VimpelCom previously stated it would cooperate fully with investigations into its Uzbekistan business. Dutch prosecutors opened a criminal investigation into the Amsterdam-headquartered operator in March 2014. The U.S. Securities and Exchange Commission is also probing VimpelCom's Uzbek business, after the operator flagged potential problems in a December 2013 SEC filing.

Uzbekistan has proved a difficult market for several operators. Russia-based MTS lost $1.1 billion in the market in 2012 when a court revoked its operating licence and its local assets were seized as part of a criminal probe into its local staff. TeliaSonera also hit trouble in Uzbekistan: in early 2013 its then CEO Lars Nyberg resigned amid allegations of corruption over the operator's licence acquisition.

For more:
- view this E24 report (in Norwegian)
- see VimpelCom's December announcement on Baksaas
- view VimpelCom's share ownership

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