TeliaSonera vows to be ‘open and transparent’ after media scrutiny of Azercell deal

28 May 2015

Sweden’s TeliaSonera has taken steps to respond to reports by Swedish news agency TT and state-run broadcaster SVT, which have suggested that the group’s purchase of a stake in Azerbaijan’s Azercell may have constituted a bribe. The media outlets have claimed that Azercell parent company Azertel, a subsidiary of Fintur Holdings – itself a joint venture between TeliaSonera (58.55%) and Turkish incumbent Turkcell (41.45%) – paid a heavily discounted USD180 million to the Azerbaijani government for a 35.7% stake in Azercell, taking full ownership of the cellco while paying significantly less than the mooted market value of USD785 million.

According to Bloomberg, TT and SVT have alleged that TeliaSonera allowed local partner Cenay Iletisimm to assume control of the company at no immediate cost, with fees to be paid via dividends from joint operations. Meanwhile, in exchange for the transaction, TeliaSonera apparently received ‘licences and other permits’ in Azerbaijan. Iletisimm is thought to be closely connected to the family of Azerbaijan President Ilham Aliyev, namely his daughters Leyla and Arzu Aliyeva.

In a statement issued by TeliaSonera, the operator clarifies that it began investigating the privatisation of Azercell ‘on its own initiative’ back in 2013, and subsequently, during the company’s 2014 annual general meeting (AGM), Marie Ehrling, the chairman of TeliaSonera’s board of directors, stated: ‘Several transactions were conducted in a manner that does not comply with sound business practices and our ethical guidelines. It cannot even be ruled out that certain transactions were illegal.’ TeliaSonera goes on to note: ‘During the past few years, we have put a lot of time and resources into investigating previous transactions and ownership relations and what they mean to us today. We have introduced new ethical guidelines, strict rules on how transactions and negotiations must be conducted, and also provided anti-corruption training to all our employees.’

TeliaSonera says it will be ‘open and transparent’ during the ongoing investigation.

Azerbaijan, Sweden, Azercell, Telia Company