TeliaSonera CEO Lars Nyberg stepped down after a review by lawyers censured the company over corruption allegations related to the operator's purchase of a phone licence in Uzbekistan.
Nyberg offered his resignation when TeliaSonera's board refused to give him support after lawyers at the firm Mannheimer Swartling reported they could neither confirm allegations of corruption or money laundering, but nor could they dismiss them. CFO Per-Arne Blomquist will replace Nyberg on an interim basis.
Accepting that there was insufficient analysis into the identity of its local partner in Uzbekistan before investing in the country, Nyberg said in a statement: "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."
TeliaSonera, which counts the Swedish government as its largest shareholder at 37 per cent, has come under intense scrutiny and criticism in Sweden after a TV investigation last year accused the telecoms company of paying money to a company controlled by an alleged close friend to the daughter of Uzbekistan's autocratic president, Islam Karimov, according to the Financial Times.
Following the TV broadcast, Swedish prosecutors opened an investigation last year into whether TeliaSonera knew, or should have known, when it bought a 3G Uzbeki phone licence from Gibraltar-based Takilant that the money was a bribe to President Karimov's family.
Nyberg had staked his position on the company being cleared, reports Reuters, but he said he now expects changes to the company's board of directors. TeliaSonera Chairman Anders Narvinger will step down April 3.
Two executives have already been named as suspects by the Swedish prosecutors, but are still working at TeliaSonera.
Shares in the operator fell nearly 2 per cent on the resignation news. "He has a good record of cutting costs and is a well-liked CEO. It's more a case of watch this space," Berenberg Bank's Barry Zeitoune told Reuters.
"Eurasia has been significant for their growth. Earnings would look far worse without the region," he added.
TeliaSonera shakes industry with 2,000 job cuts
TeliaSonera does U-turn on mobile VoIP charges
TeliaSonera gains access to Kazakhstan spectrum, network assets
TeliaSonera open to acquisitions, with 3 Denmark a potential target