Telenor loses GC following VimpelCom bribery investigation
The Norwegian telecom's general counsel has resigned after an investigation uncovered 'weaknesses in organizational structure, communication and leadership.'
On Friday, Telenor announced that GC Pal Wien Espen will be stepping down alongside chief financial officer Richard Olav Aa following a Deloitte investigation into the telecom’s handling of peer company VimpelCom. VimpelCom, in which Telenor holds a 33 per cent stake, agreed to pay out $795m to US and Dutch regulators in February in order to settle a suite of bribery allegations relating to its business in Uzbekistan.
According to the Deloitte report, a Telenor employee seconded to VimpelCom raised concerns about potential corruption to Telenor executives and Telenor-nominated board members at VimpelCom as early as mid-2011. However, Telenor’s then chief executive Jon Fredrik Baksaas was not informed of the concerns until March 2014, followed up the company’s board of directors nine months later in December 2014 and the Ministry of Trade, Industry and Fisheries in October 2015.
In December, Telenor enlisted a legal team from Deloitte to investigate the company’s handling of its ownership of VimpelCom in light of the bribery and corruption allegations engulfing the peer company. While Deloitte’s final report, made public on Friday, reiterates that no Telenor employees have been found to have acted corruptly, it suggests that members of the telecom’s leadership could have done more to respond to red flags and alert Telenor’s CEO to potential corrupt activities at VimpelCom. ‘We acknowledge that on this occasion we were unsuccessful in handling an important concern according to Telenor’s ethical standards,’ said CEO Sigve Brekke in an official statement.