Telenor’s ending of its affiliation with Jon Fredrik Baksaas, who stepped down as the operator’s CEO in August after 13 years, comes amid a wider damage limitation exercise by the Norwegian telco as questions arise about what information it did not and did not have about VimpelCom‘s alleged corruption in Uzbekistan.
Telenor’s (OSE:TEL) consultancy agreement with Jon Fredrik Baksaas has been terminated as investigations into what the company knew about corruption at VimpelCom (NASDAQ:VIP) intensify.
Baksaas, who was Telenor’s CEO when VimpelCom’s impropriety in Uzbekistan was alleged to have taken place, will also forego a bonus payment for this year, according to a Telenor statement.
In early October, Telenor said it would sell its 33% stake in VimpelCom, which last week set aside US$900m for potential liabilities arising from investigations by the US Securities and Exchange Commission, the US Department of Justice and the Dutch Public Prosecution Service relating to bribery allegations at its Uzbek subsidiary.
Baksaas said the investigations into VimpelCom had made his advisory role “challenging”, and added that the situation was “very unfortunate, complex and sad” for Telenor.
Baksaas is also the chairman of the GSMA. In response to a request for comment on the development, the industry body said: “The GSMA is aware of this morning’s announcement from Telenor and will be discussing this with our board. We will provide an update in due course.”
Telenor’s ending of its affiliation with Baksaas, who stepped down as the operator’s CEO in August after 13 years, comes amid a wider damage limitation exercise by the Norwegian telco, which last week hired Deloitte.
The auditor will conduct an external review of Telenor’s handling of its 33% ownership in VimpelCom that will cover Telenor’s nominees on VimpelCom’s board and its response to the corruption allegations.
Frank Dangeard, who became interim chairman following the dismissal of Svein Aaser last month, said he was pleased Baksaas and the board had come to an agreement.
Explaining the ending of the relationship with Baksaas, Dangeard said: “Although it is VimpelCom that is under investigation, and Telenor is cooperating with the investigating authorities as a witness, questions have been raised about what information the Telenor Group had about the alleged corruption in VimpelCom.”
Aaser left as chairman after Norway’s industry minister Monica Mæland said she no longer had confidence in him. Mæland said she had received new information about the Uzbek case that Telenor should have disclosed to Norway’s Standing Committee on Scrutiny and Constitutional Affair, and to her.
On 4 November VimpelCom’s former CEO Jo Lunder was arrested by Norwegian police relating to the corruption allegations.
Telenor is 54%-owned by the Norwegian government.
