Telenor announced on Monday it has terminated a consultancy deal with former CEO Jon Fredrik Baksaas amid the ongoing investigation into Vimpelcom’s Uzbekistan business.
Baksaas has also agreed to forego a bonus payment for 2015. The decision is effective immediately.
"The recent developments in the ongoing investigations of Vimpelcom make my role as strategic advisor to the board in Telenor challenging," said Baksaas, in a statement.
Telenor currently owns a 33% stake in Vimpelcom, and Baksaas previously served on the Russia-based telco’s board.
"I have dedicated my career to Telenor and find the situation very unfortunate, complex and sad for the company," Baksaas said. "It is vital that Telenor’s management and board of directors now have room to handle the situation effectively. I hope my decision wi ll contribute to this."
The company is being investigated by the U.S. Securities and Exchange Commission (SEC) and Department of Justice (DoJ), and the Dutch Public Prosecution Service over corruption and bribery allegations stemming from its Uzbekistan business partner Takilant.
Telenor chairman Svein Aaser recently resigned over the scandal, and last week the Norwegian incumbent hired Deloitte to conduct an external review into its dealings in Uzbekistan.
"Although it is Vimpelcom that is under investigation, and Telenor is cooperating with the investigating authorities as a witness, questions have been raised about what information the Telenor group had about the alleged corruption in Vimpelcom," said interim chairman Frank Dangeard, on Monday.
"I am pleased that the board and Baksaas have reached a mutual agreement to terminate the consultancy agreement," he said.
Vimpelcom late last week announced it swung to a US$1 billion net loss during the third quarter, largely due to a $900 million provision it made in relation to the Uzbekistan investigation.
"The discussions with the authorities are ongoing and, until concluded, there can be no certainty as to the final cost to the company of any such resolution or the nature, likelihood or timing of a definitive resolution," said Vimpelcom, in a statement on Friday.
Revenue at the telco fell to $2.44 billion from $3.54 billion a year ago on a reported basis. However, on an organic basis, revenue was up 2% year-on-year driven by positive growth in Pakistan, Bangladesh, Ukraine, Kyrgystan and Uzbekistan. In Russia, revenue was down 1% compared to the third quarter of 2014 as declining fixed-line revenue offset growth in mobile revenue.
EBITDA fell to $58 million from $1.5 billion due to $1.2 billion of exceptional items, which include the Uzbekistan provision.
