Telecoms company VimpelCom to take $900 mln investigation provision

by Reuters
Tuesday, 3 November 2015 15:54 GMT

(Adds parliament hearing in Norway, former Telenor CEO comments)

AMSTERDAM, Nov 3 (Reuters) - Telecoms company VimpelCom will take a provision of $900 million in relation to a long-running investigation by U.S. and Dutch authorities at its business in Uzbekistan, it said on Tuesday.

Dutch prosecutors have said the probe relates to alleged corruption.

VimpelCom gave no details of the investigation but said the provision was based on its ongoing assessment of the investigation during the third quarter of 2015.

VimpelCom said that discussions with the authorities were continuing and, until concluded, "there can be no certainty as to the final cost to the company of any such resolution or the nature, likelihood or timing of a definitive resolution".

The Amsterdam-based company is owned by Norway's Telenor , which holds 33 percent, and Russian billionaire Mikhail Fridman, whose LetterOne fund owns 56 percent.

A statement from Telenor described the provision as "a serious development that significantly increases our concerns in relation to the potential outcome" of the investigation.

Telenor has said the investigation is into allegations that unlawful payments were made by Vimpelcom to secure a network operating licence in Uzbekistan.

Last week, Telenor Chairman Svein Aaser resigned following a dispute with the Norwegian state over the handling of the case. [ID: nL8N12U2BV]

Industry Minister Monica Maeland said information about the investigation had been withheld from her and parliament for too long.

In an interview with Norwegian daily Dagens Naeringsliv on Tuesday, former Telenor chief executive Jon Fredrik Baksaas said that in retrospect the company should have provided parliament with information earlier.

"I am sorry," Baksaas said. "In hindsight I can see that we should have gone out with the information earlier".

Baksaas was not immediately available for comment when contacted by Reuters.

The probe has political implications because the Norwegian government holds a 54 percent stake in Telenor.

A Norwegian parliamentary committee discussed the issue in Oslo on Tuesday and agreed to hold another hearing in December on the latest development.

Executives at Vimpelcom said in May that the company was "nowhere near" the point of taking provisions as a result of the investigation, begun in March last year.

Vimpelcom releases third quarter earnings on Nov. 6. (Reporting By Anthony Deutsch in Amsterdam, Stine Jacobsen and Camilla Knudsen in Oslo; Editing by David Goodman, Keith Weir and Adrian Croft)

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