Vimpelcom on Tuesday announced that it will make a provision of US$900 million in its third quarter results related to the ongoing corruption investigation at its operations in Uzbekistan, a move that has raised concerns for parent company Telenor.
The Russian company said the provision is "based on its ongoing assessment of the investigation," without sharing any further details.
"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," Vimpelcom said.
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.
New evidence in the case came to light recently, leading to the resignation of Telenor chairman Svein Aaser last week. However, details of the new information – and on the likely outcome of the case – remain scarce.
However, Telenor is clearly worried about the potential results of the investigation.
"Telenor Group sees Vimpelcom’s announcement today as a serious development that significantly increases our concerns in relation to the potential outcome of the still ongoing investigations," the Norwegian telco said in a statement on Tuesday.
Telenor is looking to exit Vimpelcom, announcing in October that it plans to sell its 33% stake in the company.
The process could take some time though, as reiterated by new Telenor CEO Sigve Brekke on the firm’s third quarter results call.
"[Telenor is] not going to do any fire sale," he said.
