The president and CEO of Telenor Group, Jon Fredrik Baksaas, has stepped down from the supervisory board of operator VimpelCom, following “corruption allegations and speculations” regarding VimpelCom’s activities in Uzbekistan.
Telenor holds a minority position of 33 per cent and voting rights of 43 per cent in Amsterdam-based VimpelCom.
“I am stepping down from the VimpelCom board to solely focus on protecting Telenor’s position. Telenor has zero tolerance for corruption. As an owner in VimpelCom we will assist the ongoing investigations,” said Baksaas (pictured) in a statement.
In March, it came to light that VimpelCom was being investigated by US and Dutch authorities in connection to its operations in Uzbekistan.
Last month, Swedish prosecutors began investigating the possibility that VimpelCom may have bribed Uzbek authorities.
Telenor said in yesterday’s statement that it takes such allegations seriously and “will continue to take necessary actions to protect its interests.”
By stepping down from the supervisory board, Baksaas will “eliminate any potential conflict of interest under the circumstances.”
Baksaas, who is also chairman of the GSMA, joined the supervisory board of VimpelCom in 2010 when the company was established, “in order for Telenor Group to follow the company closely, given the financial position and the many challenges that Telenor faced over ownership at that time.”
VimpelCom has 10.5 million subscribers in Uzbekistan, generating $676 million in revenue in 2013, around 3 per cent of total company sales. It entered the market in 2006.
Telenor has said the decision was taken in alignment with its board of directors. According to VimpelCom bye-laws, Baksaas seconds his vote to executive vice president Kjell Morten Johnsen, who is head of Telenor Europe and on VimpelCom’s board of directors.
VimpelCom – which has operations in Russia, Italy and a number of emerging markets – suffered a 59 per cent fall in net profit for Q3 due to one-off costs from debt refinancing at its Italian unit, a weaker rouble and “macro-economic challenges” from Russia and Ukraine. However, it talked up strong mobile data revenue and subscription growth.