VimpelCom issue: Deloitte report uncovers weaknesses in Telenor

A Deloitte report, which reviewed how Telenor handled the VimpelCom bribery issue, has uncovered internal weaknesses in Telenor.

Telenor owns 33 percent equity stake in Russian telecoms VimpelCom.

Deloitte has found that Telenor employees are not involved in corrupt actions or any other legal offences.

The report points to weaknesses in Telenor’s organizational structure, communication and leadership in this matter.

Telenor today announced the resignation of CFO Richard Olav Aa and General Councel Pal Wien Espen. Fridtjof Rusten and Ole Bjorn Sjulstad, who have also been temporarily relieved of their responsibilities during the Deloitte review, will revert to their former positions in Telenor.

In November 2015, Telenor appointed Deloitte to conduct a review of Telenor’s follow up and handling of its VimpelCom ownership. Telenor’s handling of the VimpelCom ownership is described as insufficient.

“We have already implemented actions to strengthen governance procedures and the awareness of what our ethical guidelines demand of our leaders. Now we will thoroughly study the report and consider if the initiatives are sufficient,” said Telenor Chairman Gunn Wærsted.

An employee seconded to VimpelCom 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.

“Telenor is present in many markets with heightened risk. Our job is to secure sound business practice through identifying, reporting and handling demanding issues according to our ethical guidelines,” Telenor CEO Sigve Brekke.