TeliaSonera deal in Nepal raises new questions

Nordic telecom firm TeliaSonera has been hit with new revelations about suspicious business practices in Asia, this time stemming from a complex deal with a firm tied to the former ruling family in Nepal.

TeliaSonera deal in Nepal raises new questions

According to Swedish business magazine Veckans Affärer, the 4.2 billion kronor ($624 million) TeliaSonera paid in 2008 for its stake in Nepalese telecom operator Ncell ended up with a company controlled by to Raj Bahadur Singh, the son-in-law of the deposed king.

The money was funneled through a number of shell companies in several countries, including Kazakhstan and Cyprus, the magazine reports.

The magazine describes Bahadur Singh’s 2004 acquisition of Ncell as a “confiscation” whereby he took over the company from two other shareholders just prior to Ncell being awarded licences to operate mobile phone networks in the country.

Authorities have recently launched a probe into TeliaSonera’s purchase of Ncell and its ties to the king’s son-in-law stemming from suspicions of bribery, corruption, and tax fraud, according to Vekans Affärer.

However, TeliaSonera claimed the report contained “a number of errors and speculation”, claiming Ncell was bought through Visor, an established investment firm in Kazakhstan.

“We were not able to review the material before it was published so we’re now reviewing the article,” company spokesperson Thomas Jönsson told the TT news agency.

The revelations are the latest in a string of reports which have raised questions about deals struck abroad by TeliaSonera, in which the Swedish state has the largest ownership stake.

Swedish prosecutors recently launched a corruption investigation into a deal forged between TeliaSonera and a company in Uzbekistan with links to the family of the former Soviet republic’s authoritarian president.

Telecoms consultant Bengt Nordström explained that TeliaSonera has likely sought to do business with questionable regimes for from its home region because of the allure of higher profits.

“In the west, mobile phone penetration is over 100 percent and there is a lot of competition,” he told the TT news agency.

“That they instead look to emerging markets is a trend that’s been ongoing for the last ten years.”

According to Nordström, most companies conclude that the upside of new profits outweigh the downsides of having ties to governments which have come under fire for corruption or rights abuses.

He explained that the Swedish government has previously viewed the export of technology to non-democratic countries as a first step in democratic development.

“The [Swedish] state, as an owner of Telia, acts and thinks today, and considering the media’s treatment of Telia, may decide that they can no longer be owners of operations east of Finland and south of the Alps,” said Nordström.

TT/The Local/dl

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Sweden slips in global corruption rankings

Sweden has dropped from third to fourth in an annual ranking comparing the levels of perceived corruption around the world.

Sweden slips in global corruption rankings
How corrupt is Sweden? Photo: Fredrik Sandberg/TT

Its Scandinavian neighbour Denmark shared first place with New Zealand in this year's Corruption Perception Index (CPI), released by anti-corruption campaign group Transparency International on Wednesday and ranking how corrupted countries were seen to be in 2016.

Both Denmark and New Zealand were given a score of 90 on the 0 to 100 scale (highly corrupt to very clean), followed closely by Finland and Sweden, which scored 89 and 88 respectively.

While still in the top-five of 176 countries, Sweden found itself pushed down one notch from last year and the group's Sweden office warned that this was no time to be complacent.

“Sweden's good performance in the 2016 index does not mean that we are spared from corruption in the public sector,” Ulla Andrén, chairwoman of Transparency International Sweden, said in a statement.

“Over the past year we have unfortunately seen how core values have wavered considerably. Leading figures have turned out to lack an ethical compass and corrupt behaviour has damaged trust in various public institutions.”

READ ALSO: Why Denmark is world's least corrupt country

Major Swedish institutions were rocked by scandals last year, including claims of cronyism and cover-ups at the state auditor Riksrevisionen and tax agency Skatteverket. Some of the country's largest businesses, such as Telia and Ericsson, have also faced allegations of illicit payouts.

“We believe that everything colloquially referred to as cronyism is corruption,” Lotta Rydström, executive secretary of Transparency International Sweden, told The Local.

“Transparency International's definition of corruption is wider than just bribes: 'Corruption is abuse of entrusted power for personal gain', which includes nepotism, buddy contracts and so on.”

“I would probably also say that several bribe-related incidents in the business world have shown that Sweden is not as spared (from corruption) as many think,” she said.

Rydström warned that the corruption index does not cover local and regional councils, where much of the political decisions are made in Sweden. Municipalities and county councils make up around 70 percent of public administration in the country.

“A high rating does not mean that we can beat our chest and say we are still almost the best student in the classroom. Good can get better and there is plenty to work on. Public procurement, municipal auditing and whistleblower protection are some of the issues we are working on.”

As a whole, Transparency International said that no nation in the world – Sweden included – is doing enough to fight corruption.

“There are no drastic changes in Europe and Central Asia in the Corruption Perceptions Index 2016, with only a few exceptions. However, this does not mean that the region is immune from corruption. The stagnation does not indicate that the fight against corruption has improved, but quite the opposite,” it wrote in the report.