Indecent proposal? Telia reacts to USD1.4bn Uzbekistan settlement 'suggestion'

16 Sep 2016

Telia Company has given a brief statement on a proposed settlement amount of USD1.4 billion related to historical wrongdoings in Uzbekistan. A release from the Swedish telco said: ‘The U.S. and Dutch authorities have since the spring of 2014 investigated historical transactions related to Telia Company’s entry into Uzbekistan in 2007. On the evening of 14 September, Telia Company received new information from the authorities with proposals from them for a settlement with the company. The information received was general and did not go into much detail but suggests a total settlement amount of approximately USD1.4 billion which corresponds to approximately SEK12 billion for all investigations.’ Telia Company’s Independent Chair of the Board Marie Ehrling added: ‘I have said on many occasions in the past that Telia Company’s entry into Uzbekistan was done in an unethical and wrongful way and we are prepared to take full responsibility. We are cooperating fully with the authorities to bring clarity to the matter. With that said, our initial reaction to the proposal is that the amount is very high. We will now have to analyse the information and decide on how to proceed with the ongoing discussions with the authorities.’

Following corruption allegations, a ‘damage limitation’ programme saw the CEO and board of Telia Company (then known as TeliaSonera) replaced in April 2013 after an internal review found failure to conduct proper due diligence on Uzbek investment partner Takilant. The telco fired four senior employees over Central Asian-related irregularities in November 2013, before the US Department of Justice (DOJ) opened a separate investigation into the Swedish group’s transactions in Uzbekistan in March 2014, while in the same month Dutch authorities began investigating its holding company in the Netherlands for the same purpose. A separate investigation by Swedish prosecutors relating to Telia’s historical Uzbek activities is also ongoing. Telia is meanwhile in the process of divesting its entire ‘Eurasia’ mobile operating division including all its Central Asian mobile interests.

In an interview with Swedish publication, Marie Ehrling responded to the question of how much scope Telia has to negotiate down the settlement amount proposed by the Netherlands/US authorities, saying: ‘… it’s up to us to analyse the information we have received, and eventually provide an answer to the proposal … we’ll immerse ourselves in it and bring the dialogue with the authorities so that we really understand how they [arrived at the USD1.4 billion figure].’ The chairwoman stated that there is no formal time limit on Telia giving its official response, but she added that the process should be finished ‘within a reasonable time’.

Sweden, Uzbekistan, Telia Company