Telenor directors resign after VimpelCom probe

Telenor directors resign after VimpelCom probe

Telenor has announced that two executives are resigning after a probe uncovered “internal weaknesses” and “insufficient” handling of corruption allegations at part-owned VimpelCom.

One week after Deloitte was hired, Richard Aa, CFO, and Paal Wien, legal director, were suspended by Telenor for the duration of the probe. Today, those suspensions will turn into resignations.

A final report by Deloitte Advokatfirma, which was hired by Telenor’s board in November 2015 to investigate concerns of potential corruption first raised by an employee seconded to Vimpelcom in 2011, has found that Telenor’s handling of the VimpelCom ownership was “insufficient”.

Commenting on Deloitte’s report, which did not uncover any corruption at Telenor, its chairwoman Gunn Waersted, stated: "It gives Telenor partial credit for its handling of the ownership in Vimpelcom, but also points to weaknesses in organisational structure, communication and leadership in this matter. This is serious.”

Waersted was brought into Telenor to supervise the company at the end of 2015 and oversaw Vimpelcom’s agreement to pay a £795 million settlement with US and Dutch authorities over allegations that it paid bribes for an operating licence in Uzbekistan.

Vimpelcom had set aside $900 million in its 2015 Q3 financial statements because of the potential impact of alleged corruption investigations.

Telenor said that it had uncovered two cases of possible misconduct: "One case involves suspicions of financial crimes and has been reported to the local police. Due to the investigation, Telenor has been asked by local authorities to not comment any further on the case at this point. The other case is from Thailand, where Dtac's internal audit uncovered deviations from the company's guidelines relating to some site lease agreements."

Two other employees, Fridtjof Rusten and Ole Bjørn Sjulstad, who were also suspended during Deloitte’s probe have been reinstated as a result of the report.

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