Telenor CFO resigns in the wake of VimpelCom inquiry

Norwegian telco Telenor has attempted to draw a line under the VimpelCom Uzbekistan controversy by accepting the resignations of its CFO and General Counsel.

Following the resignation of its Chairman late last year, the Telenor board commissioned Deloitte to conduct and independent investigation into its activities as 33% owner of VimpelCom, which has been under investigation for corruption in its Uzbekistan operations.

While the report didn’t find any Telenor employees were involved in corruption, the company seems to have concluded CFO, Richard Olav Aa and General Counsel Pål Wien Espen should resign anyway.

“The report states that no Telenor employees have been involved in corrupt actions,” said Gunn Wærsted, Telenor Chairman. “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.”

It turns out that back in 2011 a Telenor employee seconded to VimpelCom flagged up suspicions of corruption but their concerns didn’t make it as far as the CEO until March 2014, who in turn didn’t pass them on to the board until December 2014. The Norwegian government, which is the majority shareholder of Telenor, didn’t get the memo until October last year.

“We acknowledge that on this occasion we were unsuccessful in handling an important concern according to Telenor’s ethical standards. It is however good to see that a Telenor employee noticed unacceptable practices and spoke up about them,” said Sigve Brekke, CEO and President of Telenor.

“For all of us in Telenor, this is a challenging day. To get detailed information about a very difficult and complex case unfolded in public is hard. But we have to face up to the criticism and learn from it. We take the findings seriously and will use this case to learn and improve. Telenor is present in many markets with heightened risk. Our job is to secure sound business practice through identifying, reporting and handling demanding issues according to our ethical guidelines. High ethical standards among all our employees is a vital part of our safety net.”