TeliaSonera loses chief in wake of corruption allegations

The chief executive of Swedish carrier TeliaSonera, Lars Nyberg, stepped down on Friday in the wake of a scandal over allegations of corruption involving operations in Uzbekistan.

Law firm Mannheimer Swartling was assigned to make an assessment of allegations and on Friday published a review that did not find that TeliaSonera had been involved in bribery or money laundering.

But at the same time the law firm criticised TeliaSonera for failing to conduct a sufficiently in depth analysis into the identity of the local partner in Uzbekistan before investing. It is criticism accepted by the TeliaSonera board and Nyberg personally, who said: “Even if this transaction was legal, we should not have gone ahead without learning more about the identity of our counterparty. This is something I regret.”

An investigation by the authorities is ongoing and the law firm’s findings do not mean Teliasonera is off the hook. As a result of the internal investigation, the board of TeliaSonera withdrew their support for Nyberg, prompting him to resign. “In order to continue as chief executive I need a functioning board and their explicit support. I was informed that as a result of the pending changes to the board they were not prepared to express that support. At that point I made up my mind that I would leave my position as chief executive.”

The move is a turnaround on events last year, which saw Nyberg given a vote of confidence from the firm’s board amid the allegations. An investigation by the Committee on Industry and Trade of the Swedish Parliament is ongoing, looking at TeliaSonera’s purchase of a telecom license in Uzbekistan from Gibraltar-based company Takilant. The firm served as the operator’s local partner when the Nordic telecom firm established operations in 2007, but is alleged to have close ties with the daughter of Uzbekistan’s dictator Islam Karimova.

Over the last decade Gulnara Karimova had progressed through a series of diplomatic posts and in 2007 was serving as an adviser to Uzbekistan’s Foreign Affairs Ministry. Karimova’s personal investments included Uzbek telco Uzdunorbita, which was later sold to Russian carrier MTS. Earlier this month MTS announced that Uzdunrobita had filed a petition to declare bankruptcy in the Tashkent Commercial Court as criminal charges were brought against four of its employees in relation to tax evasion charges.

TeliaSonera has appointed Per-Arne Blomquist as acting president and CEO and Mannheimer Swartling has levelled serious criticism at TeliaSonera for shortcomings in the investment process, concluding that not enough effort was made to investigate the local partner in Uzbekistan.

This week TeliaSonera reported net income of SEK21bn (€2.4bn) for 2012, which was flat year on year against net sales of SEK105bn, also flat year on year.