Telenor CFO, general counsel resign as report points to weaknesses in handling of VimpelCom

Telenor CFO Richard Olav Aa and general counsel Pål Wien Espen resigned from the Norway-based operator, after a law firm said it found weaknesses in the way the operator handled allegations of corruption at VimpelCom.

After Deloitte Advokatfirma delivered its final report as part of a review into the matter, Telenor said it reached an agreement of resignation with the pair, who were suspended in November 2015 when Deloitte commenced its investigation.

Telenor managers Fridtjof Rusten and Ole Bjørn Sjulstad, who were suspended at the same time, will re-commence their roles within the company. The pair were Telenor's nominees to VimpelCom's supervisory board prior to their suspension.

Gunn Wærsted, chair of the board of Telenor, said the company has "already implemented actions to strengthen governance procedures and the awareness of what our ethical guidelines demand of our leaders," as part of the Deloitte investigation.

While the law firm concluded that no Telenor staff were involved in corrupt actions, it described Telenor's handling of its VimpelCom ownership as "insufficient."

The report "gives Telenor partial credit for its handling of the ownership in VimpelCom, but also points to weaknesses in organisational structure, communication and leadership in this matter," Wærsted explained.

Telenor said a key part of the Deloitte report relates to the way it dealt with concerns raised by one of its employees who was seconded to VimpelCom in 2011.

The operator states that the employee alerted Telenor executives and Telenor-nominated board members in VimpelCom of concerns about potential corruption by the Netherlands-based operator, but that the concerns were not shared with Jon Fredrik Baksaas -- the former Telenor CEO -- until March 2014.

Telenor's own board members were only told of the concerns in December 2014, and it took a further 10 months for the matter to be reported to Norway's Ministry of Trade, Industry and Fisheries.

VimpelCom -- in which Telenor holds a 33 per cent stake -- was investigated after allegations that it bribed officials in Uzbekistan to gain 3G and 4G operating licences. The company in February agreed to pay a total of $795 million (€697 million) to settle the U.S. and Dutch probes.

Sigve Brekke, CEO and president of Telenor, acknowledged that the company was "unsuccessful in handling an important concern according to Telenor's ethical standards."

The company announced that its renewed focus on ethics has already uncovered potential misconduct in other parts of the business: one case involving suspicions of financial crimes in an unspecified market; a second relating to some site lease agreements by Telenor's Thai business dtac.

For more:
- see this Telenor statement

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