Kazakhstan Operations Under Scrutiny amid Fresh TeliaSonera Revelations
Nordic telecoms giant TeliaSonera is at the heart of several international corruption probes involving its activities in Uzbekistan. Now it says it may have broken the law in neighboring Kazakhstan and other countries, as well.
An external review of TeliaSonera's dealings in five countries has found that “several transactions, and actions during [2007-2013] have been conducted in a manner inconsistent with sound business practice and TeliaSonera’s ethical requirements,” board chair Marie Ehrling told an Annual General Meeting on April 2.
“It cannot even be ruled out that certain conduct has been in violation of the law,” she said.
The review, commissioned last April and conducted by international law firm Norton Rose Fulbright, covered Nepal, Kazakhstan, Azerbaijan, Tajikistan, and Georgia but focused mainly on the first three countries.
Ehrling did not specify which transactions may have been unethical or illegal, but said the review mainly concerned the “establishing of operations and acquisitions of companies and licenses.”
Areas of concern included “substantial payments to advisors and intermediaries for, among other things, lobbying activities; lack of control of business partners; and inadequate handling of warning signs.”
“One area singled out is the inadequate governance of the Eurasian operations,” Ehrling said.
Risk assessment had been inadequate “from an ethical and legal perspective,” she added. TeliaSonera had failed to ensure “sufficient expertise and knowledge to act appropriately in the very difficult and complex business environment in Eurasia, where political risk is considered to be high and corruption is widespread,” and “the culture and leadership that characterized the operations in Eurasia were not aligned with TeliaSonera’s ethical requirements.”
Full information cannot be made public, Ehrling added, since “we are operating in many complicated legally geographical areas, and there is a risk that the company incurs lawsuits that may harm the company.”
“It’s our opinion that we are as transparent as possible with regards to the circumstances and also by continuously handing over information to the Swedish prosecutor,” she said, and it was up to the courts to assess the legality of any transactions.
TeliaSonera is already under investigation in Sweden, the United States, and The Netherlands over payments of millions of dollars it made to enter Uzbekistan’s telecoms market in 2007. Those investigations are linked to a money-laundering probe under way in Switzerland in which Gulnara Karimova, the daughter of Uzbek President Islam Karimov, is a suspect.
TeliaSonera has acknowledged making those payments but has denied wrongdoing in the affair, which last year prompted the resignation of CEO Lars Nyberg and the dismissal of four senior executives.
Joanna Lillis is a journalist based in Almaty and author of Dark Shadows: Inside the Secret World of Kazakhstan.
Sign up for Eurasianet's free weekly newsletter. Support Eurasianet: Help keep our journalism open to all, and influenced by none.