U.S. authorities join probe into potential TeliaSonera corruption

TeliaSonera may have engaged in corruption during a 2007 entrance into Uzbekistan

The U.S. government’s increased focus on foreign bribery in 2014 has a new target in its sights: Swedish telecommunications company TeliaSonera AB.

The U.S. Department of Justice and Securities and Exchange Commission have opened investigations into TeliaSonera’s dealings in Uzbekistan, the company announced on March 17. The U.S. government joins an ongoing investigation from Swiss, Swedish, and Dutch authorities.

In 2007, TeliaSonera acquired an Uzbekistan wireless data license and spectrum frequency. The deal was done in conjunction with a Gibraltar-based holding company that allegedly has ties to Uzbekistan’s leadership. In 2012, a Swedish television show revealed potential corruption in the acquisitions, sparking multiple investigations.

TeliaSonera claims that the company breached its own internal ethical guidelines in the deal, but it says that it did not break any laws. According to the Wall Street Journal, former CEO Lars Nyberg resigned from his position following the scandal’s outbreak, and many other high-ranking TeliaSonera officials have stepped down from their posts.

In addition to possible bribery charges, governmental authorities are also investigating possible money laundering. Dutch authorities are investigating two of TeliaSonera’s holding companies for the crime, and TeliaSonera said the Dutch government has requested between €10 million ($13.9 million) and €20 million worth of collateral for any future claims.

Already in 2014, Mead Johnson Co., NCR Corp. and Avon Products Inc. have come under governmental scrutiny for alleged foreign bribery. In another case, aluminum giant Alcoa paid $384 million for Foreign Corrupt Practices Act violations in its dealings with the government of Bahrain.

Seeing this trend, companies and governments have both begun to bolster anti-bribery protections. New strategies and technologies are being implemented that can keep anti-bribery controls strong while limiting spending. Meanwhile Chinese Premier Li Keqiang recently laid out a new anti-corruption strategy within China that intends to increase transparency in business dealings.

 

For more on the Foreign Corrupt Practices Act, check out these recent articles:

SEC drops bribery allegations against Deutsche Telekom subsidiary

Judge rules massive Chevron damages were the result of unethical practices

Chinese Premier outlines new anti-corruption strategy

Compliance programs require a team effort

Assistant Editor

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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