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TeliaSonera says some Eurasia deals may have broken law

Source: Wed, 2 Apr 2014 17:36 GMT
Author: Reuters
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In this 2011 file photo, workmen install a sign with TeliaSonera's new corporate logo, outside a store in downtown Stockholm REUTERS/Bob Strong
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(Adds Swedish government, former CEO comment)

STOCKHOLM, April 2 (Reuters) - A scandal over TeliaSonera's TLSN.ST business dealings in Uzbekistan widened on Wednesday after the Swedish telecoms firm said it could not rule out that some of its actions in other Eurasian markets had broken the law.

In 2012, Swedish prosecutors launched an investigation into allegations of corruption related to Telia's purchase of a 3G licence in Uzbekistan, with U.S. and Dutch authorities also carrying out their own probes. (Full Story) (Full Story) (Full Story)

Telia chairwoman Marie Ehrling said problems in other Eurasian markets had also been identified by a review conducted by law firm Norton Rose Fulbright on Telia's behalf.

"The board can unfortunately say that several transactions and practices have not been handled in accordance with good business practice," Ehrling said. "It can not be excluded that certain actions have been criminal."

The probe focused on Kazakhstan, Nepal, Azerbaijan, Tajikistan and Georgia.

Telia's CEO and most of the board quit after an earlier internal investigation found it failed to conduct sufficient checks when buying a 3G licence in Uzbekistan in 2007.

New CEO Johan Dennelind, appointed in June last year to improve business practices, fired a further four top executives.

In a rare move, shareholders on Wednesday voted against discharging former CEO Lars Nyberg from personal liability for the past financial year, meaning the firm could later sue him personally.

The Swedish state, Telia's biggest shareholder with around 37 percent of the stock, backed the majority view.

"We as owners today lack information to say whether Lars Nyberg in his role as CEO in January 2013 failed in his duties and thus can be held liable," state secretary with responsibility for state-owned companies, Erik Thedeen, told the meeting.

Telia completed two acquisitions in Kazakhstan in 2013 while Nyberg was chief executive.

In a letter to shareholders published on the website of newspaper Svenska Dagbladet, Nyberg said he believed the company's deals in Kazakhstan were "clean".

He said he believed TeliaSonera had made proper checks regarding who owned the assets that were purchased and who were the ultimate recipients of the money that was paid out.

(Reporting by Olof Swahnberg and Sven Nordenstam, additional reporting by Simon Johnson; Editing by Mark Potter)

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