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U.S. authorities probe TeliaSonera's Uzbek licence deal

Source: Reuters - Mon, 17 Mar 2014 14:28 GMT
Author: Reuters
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A woman walks past TeliaSonera's logo during the company's fourth quarter result presentation January 31, 2013 REUTERS/Fredrik Sandberg/Scanpix
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STOCKHOLM, March 17 (Reuters) - U.S. authorities are investigating TeliaSonera's purchase of a 3G licence in Uzbekistan in 2007, the Swedish telecoms operator said, a deal that has forced the firm to replace top management and most of its board.

Swedish prosecutors have already launched a preliminary inquiry into corruption allegations related to the 2.3 billion Swedish crowns ($360.5 million) deal, while Dutch authorities raided Telia's offices this month.

In a further widening of the investigation, the company said on Monday that it had received requests from the U.S. Department of Justice and U.S. Securities and Exchange Commission (SEC) for it to hand over documents related to Uzbekistan.

Telia said it was cooperating with all authorities in the matter.

A spokesman for the company, 37 percent owned by the Swedish state, said the questions from the U.S. authorities were very broad and that it had not been informed what had triggered the new investigation. "This is the very early stages of their investigation," said Peter Borsos, head of group communications.

The U.S. Department of Justice could not immediately be reached for comment, while the SEC declined to comment.

Swedish prosecutor Gunnar Stetler - in charge of Sweden's investigation into the Uzbek licence deal - said he had asked U.S. authorities, among others, for help but declined to give more information.

There has been intensifying international scrutiny of the Uzbek telecoms market, with Russian operator Vimpelcom - Uzbekistan's biggest mobile operator by subscribers - saying last week it was being investigated by U.S. and Dutch authorities.

President Islam Karimov has ruled the gas-rich nation, central Asia's most populous country, with an iron hand since it gained independence from the Soviet Union in 1991.

Last year, Telia's then-chief executive resigned after an in-house investigation criticised the company for lack of due diligence when buying the 3G licence in the country, ranked by Transparency International as one of the world's most corrupt.

New CEO Johan Dennelind fired four top executives after a law firm appointed by Telia to look into its dealings in Eurasia, which makes up around 20 percent of its sales, found some transactions had not been conducted in line with sound business practices.

Telia said earlier this month that the Dutch holding companies which control its operations in Uzbekistan had been raided by authorities in a preliminary investigation into bribery and money laundering.

It said on Monday that the Dutch authorities had requested collateral against any future financial claims against Telia UTA Holding BV, one of the holding companies.

"According to the information we have currently, the request for collateral is between 10 million euros ($13.93 million) and 20 million," Telia said.

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