telenor accepts mass corruption at its asia biz clears ceo brekke

Norwegian telecom operator Telenor that offers telecom services in Asia including India, Bangladesh and Thailand, has accepted that there have been instances of irregular business practices and mass corruptions in its Asian markets.

Though the company has accepted there are three such cases of widespread corruption, it has named only two markets – Thailand and Bangladesh- and left to guess the other case or the market.

However, it has hinted something.

“Telenor Group Internal Audit has uncovered matters related to suspicions of financial crimes and reported them to the local police in one of our markets. Due to the investigation, Telenor has been asked by local authorities not to comment any further on the case at this point,” a company statement said.

Citing the irregular practices in the other two markets, Bangladesh and Thailand, Telenor said that its internal committee has discovered the incidents, and its internal audit team has taken all due measures in compliance with the company’s policies.

The internal audit committee has also cleared the name of CEO Sigve Brekke in this case. Earlier, it was believed and reported that Sigve Brekke is involved in all these cases as all corruption related cases emerged from the markets where Brekke was at the helm.

Cases In Bangladesh

The corruption case in Bangladesh is related to Grameenphone, the country’s largest operator and is owned by Telenor. The company’s officials are involved in granting sponsorships to few events and companies that are ‘unacceptable’ in Telenor’s terms. One such sponsorship was related to Bangladeshi military. The company was involved in 11 such sponsorship cases. The matter was reported to Sigve Brekke, who was then the Chair of Grameenphone board of directors and head of Asia operations. He changed the rules and placed some new guidelines.

However, in 2016, it was found that the company is involved in some new ‘unacceptable’ sponsorship agreements leading to more corruptions. The agreements included sponsorships of sports tournaments, the security police’s jubilee celebrations, the refurbishment of their canteen as well as financial support to a phone book publication for the police. It was then believed that Sigve Brekke is involved in these corrupt practices. The matter was then reported to Brekke as well as Chair of the Telenor Board Gunn Waersted.

As of now, all such sponsorships were cancelled and no payment is made to any party, the company said. The Board also did not find Brekke’s involvement in these cases.

“The Board of Directors in Telenor ASA has previously processed and considered Sigve Brekke’s involvement in the case and regards it as concluded with regards to Brekke’s handling,” a company statement said.

Case in Thailand

The case in Thailand pertains to dtac and the way it has granted telecom tower lease agreements. Telenor in April this year said that dtac through its internal audit function had discovered deviations linked to site lease agreements in Thailand. dtac therefore hired PWC to conduct an external review. Their investigations showed that some local partners were unable to provide sufficient documentation of ownership of the land where the base stations are located. The rental agreements were according to common industrial practice in Thailand, but was not in line with Telenor’s internal guidelines. dtac has therefore changed its rental agreement routines and initiated a process to ensure that ownership is clearly documented in all rental agreements.

This work will be concluded in 2017, Telenor said.

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