TeliaSonera second operator to face Dutch probe into Uzbekistan business

TeliaSonera became the second operator this week to be probed by Dutch authorities over its business in Uzbekistan.

The Sweden-based company confirmed Dutch prosecutors visited the offices of two of its Netherlands-based holding companies on Tuesday, in the first stage of an investigation into bribery and money laundering.

TeliaSonera explained in a statement that its UCell operation in Uzbekistan is one of the businesses handled by the holding companies, TeliaSonera UTA Holding and TeliaSonera Uzbek Telecom Holding.

"The Dutch authorities carried out searches at the companies during on [sic] March 11 to obtain access to documents. TeliaSonera is cooperating fully with the Dutch authorities," the company statement explained.

TeliaSonera's words on cooperation echo those of VimpelCom, which was visited by the Dutch Public Prosecutor's Office on Tuesday and also had documents seized as part of a criminal investigation. VimpelCom stated the visit related to its business in Uzbekistan, and said the U.S. Securities and Exchange Commission (SEC) was also seeking access to documents as part of a probe.

Although neither operator has commented on the specifics of the Dutch investigations, the probes appear to be linked to TeliaSonera and VimpelCom's acquisition of operating licences in Uzbekistan.

An investigation by TV reporters into TeliaSonera in 2012 alleging the company paid money to a company controlled by a close friend of the daughter of Uzbekistan's President, Islam Karimov, prompted a formal investigation by Swedish prosecutors. That probe focused on whether the company knew, or should have known, that money paid to Gibraltar-based Takilant for a 3G licence was effectively a bribe to the President's family.

The scandal claimed the head of TeliaSonera's CEO, Lars Nyberg, who stepped down in February 2013. At the time, Nyberg said he regretted not "learning more about the identity of our counterparty" before proceeding with the transaction.

Four more TeliaSonera executives--among them the operator's CFO Per-Arne Blomquist--were subsequently fired after the company extended its investigation to include other markets in its Eurasia operations. TeliaSonera also turned the findings of its probe over to Swedish prosecutors.

The Dutch investigation rounds out a bad week for TeliaSonera, which on Monday confirmed its Kcell unit in Kazakhstan had lost a court case relating to claims by the country's Agency for Competition Protection that the company abused its dominant position in Kazakhstan, and so violated customers' rights.

For more:
- see TeliaSonera's investigation announcement
- see this separate TeliaSonera release on Kcell

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