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Norway Forces Out Telecom Chief Amid Uzbek-Linked Corruption Probe

  • Mike Eckel

Telenor's former chairman, Svein Aaser

Telenor's former chairman, Svein Aaser

Norway's government has forced the resignation of telecom giant Telenor's chairman in the latest fallout from a multinational corruption investigation focusing on Uzbekistan and possible bribes paid to the daughter of its authoritarian president.

Norwegian Industry Minister Monica Maeland said in an October 30 statement that the decision to force Svein Aaser to resign was due in part to the investigation involving the Dutch-headquartered telecom company VimpelCom, in which Telenor holds a 33 percent stake.

"I no longer have confidence in Telenor's chairman," Maeland said.

The Norwegian government holds a 54 percent stake in Telenor.

"VimpelCom has been under investigation for several years, and this has been challenging for Telenor," Aaser said in a statement released by Telenor. "I would like to emphasize that it is VimpelCom that is under investigation and that Telenor has fully cooperated with investigating authorities as a witness."

Telenor announced earlier this month it was selling its 33 percent stake in VimpelCom.

Aaser's resignation was the latest development in the spiraling multinational investigation into European and Russian telecom companies and how they gained access to Uzbekistan, which Maeland specifically mentioned in her statement.

As Central Asia's most populous nation, the country has seen rapid growth in its mobile-phone market, even as its government, under President Islam Karimov, continues to be one of the most repressive in the world.

Last year, VimpelCom and two other telecom companies -- MTS and TeliaSonera -- announced they were under investigation by the U.S. Justice Department and the Securities and Exchange Commission for possible violations of the Foreign Corrupt Practices Act and other laws.

Parallel investigations are taking place in the Netherlands, Switzerland, and Sweden.

VimpelCom is one of Russia's largest mobile providers, and TeliaSonera is a Swedish-Finnish communications giant.

In March, the U.S. Justice Department asked Sweden to seize $30 million in funds held in the Scandinavian bank Nordea in connection with the probe.

"The U.S. investigation has revealed that VimpelCom, MTS, and TeliaSonera paid bribes to Uzbek officials to obtain mobile telecommunications business in Uzbekistan and that funds involved in the scheme were laundered through shell companies and financial accounts around the world, including accounts held in Sweden, to conceal the true nature of these illegal payments," the Justice Department request said.

Allegations that TeliaSonera paid bribes to a shell company connected to Karimov's daughter, Gulnara, sparked the resignation of four senior executives last year and a criminal investigation by Swedish prosecutors that may return indictments early next year.

Last month, TeliaSonera announced it would try to sell all its holdings in Uzbekistan and other Central Asian markets, citing what CEO Johan Dennelind called "unresolved issues in the Eurasia region."

Telenor, for its part, does not face any known criminal investigations in the United States.

However, the issue of Telenor's relationship with VimpelCom prompted parliamentary hearings earlier this year after a whistle-blower detailed alleged bribes paid to government-connected officials to gain access to the Uzbek market.

Last December, Telenor's then-CEO, Jon Fredrik Baksaas, resigned from VimpelCom's board in order to "solely focus on protecting Telenor's position. Telenor has zero tolerance for corruption."

The company that investigators have suggested is at the heart of Uzbek bribery scheme has been identified in court papers and elsewhere as Takilant Ltd.

The Gibraltar-registered company's nominal head was a close business associate and confidante of Gulnara Karimova, who is now reportedly under house arrest in Uzbekistan.

With reporting by AFP and