Telecom Lead Europe: TeliaSonera has appointed Per-Arne Blomquist as acting president and CEO.
Blomquist replaces Lars Nyberg, who resigned as president and CEO, following a report by Mannheimer Swartling saying the internal controls were not sufficient to ensure that it did not risk becoming involved in any unethical business, and that thereby the company’s internal ethical guidelines were not followed completely.
“The Mannheimer Swartling review criticizes TeliaSonera, not least that we did not conduct a sufficiently in depth analysis into the identity of our local partner in Uzbekistan before we invested in the country or into how this partner came to own the assets that were later obtained by TeliaSonera. Even if this transaction was legal, we should not have gone ahead without learning more about the identity of our counterparty. This is something I regret,” said Nyberg.
The TeliaSonera board said Mannheimer Swartling has not found any substance to the allegations that TeliaSonera committed bribery or participated in money laundering in connection with its investments in Uzbekistan.
Mannheimer Swartling said the suspicions of crime expressed by the Swedish Prosecution Authority cannot be dismissed by this investigation. Mannheimer Swartling also acknowledges that business ethics, as well as OECD and UN regulations and national legislation, have been strengthened significantly in recent years.
Mannheimer Swartling directs serious criticism at TeliaSonera for shortcomings in the investment process and concludes that not enough effort was made to investigate neither the local partner in Uzbekistan, nor how the local partner could hold the rights which were later transferred. Mannheimer Swartling says that the internal controls were not sufficient to ensure that it did not risk becoming involved in any unethical business, and that thereby the company’s internal ethical guidelines were not followed completely.
The board’s conclusion is that the investments were not carried out in a satisfactory manner. Overall, the internal information and control at different levels (owners, directors, management and line management) was not sufficient to pick up warning signs that there were ethical risks.
The Board would, at the same time, like to emphasize that behind TeliaSonera investments there was a broad consensus among major shareholders and the Board of directors for expansion into Eurasia. This business has contributed significantly to the Group’s growth and profitability, and foreign investment in infrastructure has been an important element in modernizing countries following the collapse of the Soviet Union.
When Sweden’s Telia and Finland’s Sonera merged in 2002, the newly formed group had a total of 20 million customers, primarily in Sweden and Finland. Today, TeliaSonera has over 70 million customers in majority-owned operations in 15 countries and sales have almost doubled from SEK 59bn to the current SEK 105bn.
When considering TeliaSonera’s conduct and its consequences, it cannot be ignored that many key people in the company were changed during 2007, both in the business area and at the Board and executive management level. This may have contributed to a loss of information and that there was lacking continuity.
The Board and management now want to increase its efforts in developing principles and processes that respect human rights and protect the company from corruption. We will continue to develop our action plan initiated in April last year, where human rights are at the core. We have also started to work with Transparency International Sweden as advisors, with the goal of ensuring that our anti-corruption efforts attain high standards and stand up to a stringent international comparison.
