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TELENOR

Ex-Telenor CEO risks US corruption charges

Former Telenor chief executive Jon Fredrik Baksaas risks criminal charges in the US and elsewhere if Russian mobile firm Vimpelcom is found guilty of corruption, Norways NRK has reported.

Ex-Telenor CEO risks US corruption charges
Jon Fredrik Baksaas presents his last set of Telenor results in July. Photo: Torstein Boe / NTB scanpix
According to Professor Beate Sjåfjell, a law professor at the University of Oslo, Baksaas’s three years on board of Vimpelcom between December 2011 and December 2014 mean he could be held partly responsible if Vimpelcom is proven to have given bribes in Uzbekistan. 
 
“The board of a company has the ultimate responsibility for ensuring that it is operated lawfully,” Sjåfjell told Norwegian state broadcaster NRK. “As a result, Baksaas and the other directors of Vimpelcom could risk a criminal prosecution.” 
 
Vimpelcom, in which Telenor owns a 33 percent stake, is being investigated by American and Dutch authorities for paying bribes to set up its Beeline phone company in Uzbekistan. 
 
Sjåfjell argued that even without evidence showing Baksaas was  involved in or even aware of illegal payments, the well-publicized corruption issues in Uzbekistan could leave him vulnerable to charges of negligence. 
 
“Uzbekistan is so high on the list of world’s most corrupt countries that anyone at all familiar with anyone aware that Vimpelcom wanted to establish themselves there must have realized that they had a special responsibility to check whether the investment took place in a correct manner,” Sjåfjell said. 
 
Birthe Eriksen, an expert on corruption at the Norwegian School of Economics (NHH), said that US authorities were increasingly seeking to hold the board members of companies responsible for violations of the US Foreign Corrupt Practices Act. 
 
Her colleague Tina Søreide said that executives could be charged in the US, even without any proof of direct personal involvement 
 
“Board members can be held accountable for the failure of systems, even if it cannot be proven that they have requested or accepted that the company become involved in corrupt practices,” she said. 
 
“There is evidence that board members play an important role in preventing corruption, and whistle-blowers are encouraged to contact the board if they have information about corruption,” she added. 
 
“Through making directors personally responsible, the justice system aims to reduce the willingness of board members to remain passive when they receive information about corruption.” 
 
According to Norway's Klasskampen newspaper the law firm hired by Telenor to “leave no stone unturned” in its investigation of how Telenor handled the Vimpelcom case will not touch on what information the Telenor directors on Vimpelcom's board were given. 
 
“When I talk about an investigation of the Telenor system, I mean it internally within Telenor,” the company's new chief executive Sigve Brekke told the newspaper. “We have no record of what has happened on Vimpelcom's board.” 

TELENOR

Norway’s Telenor sells out of India as tycoon weighs in

Indian telecom giant Bharti Airtel will buy the local operations of Norway's Telenor, it said Thursday, as the ultra-competitive mobile market is shaken up by the country's richest man.

Norway's Telenor sells out of India as tycoon weighs in
Former Telenor CEO launching the company's ill-fated India business in 2009. Photo: peerdahl/Wikimedia Commons
Tycoon Mukesh Ambani launched Reliance Jio's 4G network in September with an audacious free service for the rest of 2016, followed by vastly cheaper data plans and free voice calls for life.
 
The move forced rivals to slash their tariffs and scramble to match the deep pockets of Jio, which is backed by Ambani's vast energy-to-chemicals conglomerate Reliance Industries and picked up 100 million subscribers in its first six months
   
Bharti's acquisition is the latest movement towards consolidation in India's telecoms sector as major players try to position themselves to best face the tough new environment.
   
The move, which still needs to be approved by regulators, will enhance its coverage, the company said in a statement to the Bombay Stock Exchange (BSE), and see Telenor exit India.
   
“The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall base and network,” the Indian firm said in the statement.
   
Last month British mobile phone behemoth Vodafone announced that it was in talks to merge its Indian unit with Mumbai-based Idea Cellular in its own move to counter Jio's rise.
   
That deal would create India's largest telecoms company. Global brokerage firm CLSA estimated that the pair would command a combined 43 percent share of market revenue, ahead of Airtel, which is currently the market leader, on 33 percent.
 
Reliance Communications — owned by Ambani's brother Anil Ambani — and Tata Teleservices, part of the sprawling salt-to-steel Tata conglomerate, are also reportedly in talks to join forces.
   
Reliance merged with telecom operator Aircel in September last year. Bharti Airtel's shares surged more than five percent in Mumbai morning trade following the Telenor deal announcement.
   
“The decision to exit India has not been taken lightly,” Sigve Brekke, Telenor Group CEO, said in the statement.
   
“After thorough consideration, it is our view that the significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return,” he added.
   
Telecoms analyst Baburajan Kizhakedath said Telenor was quitting India because the intense competition meant there was no scope for growth. “The Airtel-Telenor deal is probably the best exit route for Telenor,” he told AFP.