Telenor has suspended two of its top executives as a result of an investigation into its links with Russia’s Vimpelcom, which stands accused of corruption in Uzbekistan.
The Norwegian incumbent announced late on Wednesday that chief financial officer Richard Olav Aa and general counsel Pål Wien Espen have been temporarily relieved of their responsibilities.
The move stems from an ongoing Deloitte investigation into Telenor’s handling of its minority stake in Vimpelcom, the telco said.
"To avoid questions being raised about the review we have come to a mutual understanding that Richard and Pål will be temporarily relieved of their responsibilities until the facts have been established," Telenor CEO Sigve Brekke said.
"We have no reason to believe that these two executives have been involved in the alleged corruption in Vimpelcom," Brekke said. "They are trusted managers with a solid track record in Telenor."
The executives in question maintain they have handled concerns over Vimpelcom’s investments in Uzbekistan "in a correct manner," Telenor said. Both will keep their salaries and other benefits during the suspension.
Executive vice president Morten Karlsen Sørby will serve as acting chief financial officer, and will immediately withdraw from his position on Vimpelcom’s board.
Vimpelcom has been under investigation in Uzbekistan since early 2014. The U.S. Securities and Exchange Commission (SEC) and Department of Justice (DoJ), and the Dutch Public Prosecution Service, are probing its dealings with Takilant, a company it has worked with in the country, including to facilitate the acquisition of spectrum. The investigation centres on allegations of bribery and corruption at the business.
The situation is taking its toll on Vimpelcom and on Telenor.
Vimpelcom swung to a US$1 billion net loss during the third quarter of this year, largely due to a $900 million provision it made in relation to the Uzbekistan investigation. The operator said it cannot be certain of the result – or final cost – of the investigation.
Late last month, Telenor chairman Svein Aaser was forced to resign after new evidence in the case came to light, Norway’s industry minister Monica Mæland revealed. That new information has not yet been made public.
Former Telenor chief executive Jon Fredrik Baksaas, who has been serving the telco in a consultancy role, had his contract terminated earlier this week as a result of the Vimpelcom investigation. And ex-Vimpelcom CEO Jo Lunder was arrested in Norway last week in connection with the case.
