WASHINGTON -- The former chief executive officer of telecoms company VimpelCom has been detained by Norwegian police as part of a corruption investigation involving bribes allegedly linked to the daughter of Uzbekistan’s president.
The arrest of Jo Lunder on November 4 was the latest twist in a multinational corruption case that has exposed illicit transactions once used by European telecoms to gain access to the mobile market in Uzbekistan, Central Asia’s most populous country.
Lunder’s defense lawyer Cato Schiotz told RFE/RL that Lunder was taken into police custody on charges related to unspecified payments made in 2011 when Lunder was VimpelCom’s CEO. He left the position in April.
Norway’s financial crimes agency, known as Okokrim, could not be reached for comment, but it issued a statement that referenced VimpelCom’s minority shareholder, Telenor ASA. The Norwegian government holds 54 percent of Telenor.
“VimpelCom is being investigated in both the Netherlands and in the United States. Okokrim has assisted authorities in the Netherlands and Switzerland to obtain information from Telenor ASA, and assisted with questioning in Norway. In consideration of the ongoing investigation, Okokrim at this stage will have no further comments.”
Lunder’s arrest came a day after VimpelCom announced it was setting aside nearly $1 billion to deal with potential liabilities stemming from the criminal investigations being conducted by the U.S. Justice Department and Securities and Exchange Commission (SEC), as well as the Dutch Public Prosecution Service.
The developments in Norway are a new front in the expanding number of jurisdictions where corrupt payments linked to President Islam Karimov's eldest daughter, Gulnara, are being examined. Gulnara was once a socialite, aspiring pop star, fashion designer, and United Nations ambassador who is now reportedly under house arrest in Uzbekistan.
Last week, Norway’s government forced the resignation of Telenor’s board chairman for related concerns.
In early 2014, VimpelCom and two other telecom companies -- MTS and TeliaSonera -- announced they were under investigation by U.S. officials for possible violations of the Foreign Corrupt Practices Act and other laws.
Parallel investigations are also taking place in the Netherlands, Switzerland, and Sweden.
MTS is Russia’s largest mobile-phone operator, while VimpelCom, through its Beeline subsidiary, is its third-biggest. Both are traded on the U.S. NASDAQ stock exchange. VimpelCom is headquartered in the Netherlands and reportedly controlled, through a series of intermediary companies, by Russian billionaire Mikhail Fridman.
MTS, meanwhile, issued its own update on its potential liabilities, saying in a statement on November 3: “Recent announcements with regard to Uzbekistan by MTS’s peers in the market have naturally raised questions among stakeholders and partners to MTS’s management. At this time, MTS can reiterate that it is cooperating with the investigation, and it is too early to draw any conclusions based on the experiences of others in the Uzbekistan market. As there have yet been no new developments, MTS can make no further comment or provide new information.”
Meanwhile, allegations that TeliaSonera, a Swedish-Finnish communications giant, paid bribes to a shell company connected to Karimova was followed by the resignation of four senior executives last year. A criminal investigation by Swedish prosecutors may return indictments in that case early next year.
TeliaSonera announced in September it would try to sell all its holdings in Uzbekistan and other Central Asian markets, citing what the CEO called "unresolved issues in the Eurasia region."
Telenor followed suit last month, saying it would seek to sell its 33-percent stake in VimpelCom.
The company that is at the heart of the alleged bribery scheme has been identified in court papers and corporate filings as Takilant Ltd. The Gibraltar-registered company's nominal head was a close business associate and confidante of Karimova.
Also on November 4, the first in what is likely to be a series of lawsuits was filed in U.S. District Court in New York accusing VimpelCom executives, including Lunder, of violations of U.S. securities laws.
According to the lawsuit, VimpelCom paid “tens of millions of dollars” to the company controlled by Karimova to gain access to Uzbek market.
