Two senior Telenor executives stepped down after a Deloitte report uncovered “internal weaknesses” in how the Norwegian firm handled corruption allegations at VimpelCom, in which Telenor holds a 33 per cent stake.
The report says no Telenor employee was involved in corrupt actions, and it gives the company “partial credit” for how it handled its ownership in VimpelCom, but does point to weaknesses in its organisational structure, communication and leadership.
“This is serious,” said Gunn Waersted, chair of the board of Telenor in a statement.
“The Board and the management recognise that we must improve how we work. It is obvious to follow laws and regulations, but we have to reach further. There should never be any doubt that we in Telenor are fully compliant with our ethical guidelines,” he added.
The company appointed Deloitte in November 2015, following the resignation of then chairman Svein Aaser. Now, two more executives are leaving: CFO Richard Olav Aa and general counsel Pal Wien Espen both agreed to resign. Both have been suspended since the end of 2015.
However, Fridtjof Rusten and Ole Bjoern Sjulstad, who were suspended at the same time, will return to their positions as CFO of Telenor subsidiary Dtac and head of Telenor Russia, respectively.
Part of the Deloitte report relates to how Telenor responded to corruption allegations that were raised by one of its employees seconded to VimpelCom. The person raised concerns of potential corruption to executives in Telenor and to Telenor nominated board members in VimpelCom.
“This concern, however, was not shared with Telenor’s then CEO, Jon Fredrik Baksaas, until March 2014 and then to the Telenor Board of Directors in December 2014. The Ministry of Trade, Industry and Fisheries was informed in October 2015,” the company said.
“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.
The Telenor Board and management have initiated several measures to improve the company’s work with governance, compliance and transparency.