VimpelCom sets aside $900 million in bribe probe

03 November 2015 | Alan Burkitt-Gray


VimpelCom is making a provision of $900 million in its third-quarter financial statements because of the potential impact of alleged corruption investigations concerning the group’s business in Uzbekistan.


Telenor, which owns 33% of VimpelCom, greeted the announcement with concern, saying that it was “a serious development that significantly increases our concerns in relation to the potential outcome of the still ongoing investigations”.

The emerging scandal has already led to the resignation earlier this week of Telenor’s chairman, Svein Asser, who said that he did not agree with the way the investigation was being conducted. 

VimpelCom, based in Amsterdam, said in a statement: “As announced in February of 2015, the company has been exploring resolution of the Company’s potential liabilities. The company continues to cooperate with the authorities. Based on its ongoing assessment of the investigation during the third quarter of 2015, the company will make a provision in the amount of $900 million in its third quarter financial statements.

“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.”

Telenor announced in early October 2015 that it was to sell its stake in VimpelCom - though that move will now be on hold until the investigations are concluded and VimpelCom’s liability can be assessed more accurately.

Behind the investigations are allegations, according to Telenor, that VimpelCom made unlawful payments to a company called Takilant in order to secure licenses in Uzbekistan. The accusations were originally made in 2012, at the time that similar accusations were made against another Scandinavian company, TeliaSonera, about its investments in Uzbekistan. Those led to the resignation of the CEO at the time and the dismissal of the CFO.

VimpelCom’s stock is traded on the US NASDAQ exchange and so it is subject not only to the rules of the US regulator, the Securities and Exchange Commisssion, but to the US Foreign Corrupt Practises Act.

VimpelCom said: “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. At this time, the company will make no further comments on the ongoing discussions.”