Telenor Begins Its Review Of VimpelCom

telenorNorway's Telenor ASA sought to control damage from bribery allegations engulfing its 33%-owned affiliate VimpelCom on Thursday, as Norwegian prosecutors detained a former VimpelCom chief executive and launched their own corruption probe into that company.

VimpelCom, Russia's third-biggest telecommunications operator, is currently the focus of U.S. and Dutch investigations into alleged corruption related to its operations in Uzbekistan.

Telenor said it has hired a law firm to review how it has handled its VimpelCom ownership and representatives' actions at the U.S.-listed company over the past 10 years, especially when it expanded in Uzbekistan.

Telenor, which earlier this week said the U.S. and Dutch probes in Amsterdam-based VimpelCom could complicate its plan to sell its stake, declined to comment on the Norwegian investigation.

The latest probe opens a new front in what has become an intertwined set of investigations already involving U.S., Dutch and Swiss authorities. In addition to VimpelCom, U.S. bribery probes of companies doing business in Uzbekistan are targeting TeliaSonera AB of Sweden and Russia's Mobile TeleSystems PJSC. U.S. prosecutors are seeking to seize hundreds of millions of dollars in assets they regard as bribes paid by the three companies to secure business in Uzbekistan, according to U.S. court documents.

VimpelCom, which on Tuesday said it had set aside $900 million to accommodate possible losses related to the investigations, declined to comment on the Norwegian probe. The company said it was fully cooperating with U.S. and Dutch authorities.

TeliaSonera said it wasn't possible to assess when or how the probes will be resolved. The company said it doesn't rule out that certain transactions related to its activities in Uzbekistan have been in violation of the law. Mobile TeleSystems declined to comment on the corruption allegations but said it was cooperating with judicial authorities.

As part of Thursday's developments, Norwegian prosecutors said they were detaining and questioning Jo Lunder, a former VimpelCom CEO, on suspicions of corruption related to the telecommunications company's operations in Uzbekistan.

Mr. Lunder, a Norwegian citizen who was chief executive of VimpelCom from 2011 to April 2015, was detained at the Oslo airport on Wednesday, according to Norway's chief public prosecutor, Marianne Djupesland.

Ms. Djupesland confirmed Norway's decision to launch its own probe but declined to provide details.

A lawyer for Mr. Lunder, Cato Schiotz, told Norwegian radio that his client was questioned for several hours about a $30 million money transfer in 2011, made only two months after he took the helm at the company.

The lawyer said Mr. Lunder denied any wrongdoing. He said police intended to keep his client in temporary custody, something he would challenge in court on Friday. Norwegian police couldn't be reached for comment.

Mr. Lunder is currently CEO of the Fredriksen Group, which manages the holdings of billionaire John Fredriksen.

The Fredriksen Group couldn't immediately be reached for comment.

The sprawling corruption allegations have sparked a debate within Norway's government and parliament over how much current and former executives at the majority state-run company knew about alleged wrongdoing at VimpelCom. Last week, Telenor's chairman resigned amid disagreement with the government.

Across the Atlantic, U.S. law firm Pomerantz LLP filed a suit against VimpelCom in New York late Wednesday, saying it aimed to have the complaint certified as a class action. Pomerantz accused the telecom operator of misleading shareholders by failing to disclose alleged bribery payments.

"We won't comment on specific litigation but to be clear, we will zealously defend against these sorts of opportunistic actions," VimpelCom said in a statement.

Telenor declined to comment on the Pomerantz suit.



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