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Telia Sonera hangs up on central Asia markets

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Telia Sonera hangs up on central Asia markets
TeliaSonera CEO Johan Dinnelind. Photo: Fredrik Sandberg/TT
15:03 CEST+02:00
Nordic telecommunications giant TeliaSonera's share prices shot up on Thursday after the company announced it was pulling out of seven countries in central Asia. The firm has faced a number of investigations into alleged corrupt activities in the region.
The Swedish-Finnish firm said it would gradually reduce its presence before eventually stopping all of its business dealings in Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova, Nepal and Tajikistan, which currently make up one fifth of its sales.
 
The firm's bosses said they instead planned to focus on its more established markets in the Nordics and Baltics, after being "unable to rule out that crimes have been committed" in relation to its business dealings in central Asia. 
 
TeliaSonera has faced a number of bribery and money laundering investigations and previously admitted that it did not know who was behind the firm's partner companies in Azerbaijan and Uzbekistan.
 
It also revealed that it was sitting on the equivalent of close to five billion Swedish kronor ($607 million) in Uzbekistan and Nepal, which it was unable to access from the Nordics.
 
On Thursday the firm's CEO Johan Dinnelind told the TT news agency that after trying to clarify the situation for two years, it had taken the decision that "we will not succeed" and decided to "take a stand" and shift its activities as a result.
 
In a conference call reported by the Reuters newswire he added: "We think we have exhausted our options to resolve the two major issues, about partners and repatriation of cash."
 
Dennelind's decision comes two years after he was given the job of trying to mend the company's reputation following corruption claims which first surfaced over a deal to secure a mobile licence in Uzbekistan. The scandal forced out most of the firm's board and caused Dennelind's predecessor Per-Arne Blomquist to get the sack.
 
TeliaSonera shares shot up following the announcement that it was withdrawing from central Asia, rising 3.8 percent by 12.40pm Stockholm time.
 
The telecoms operator has recently indicated that it is seeking to grow its business by expanding into the entertainment sector.
 
Earlier this year it bought a 1.4 percent stake in music streamer Spotify, valuing the online music service at more than $8.2 billion. Reuters said on Thursday that a senior banker who has done business with TeliaSonera has suggested that MTG, a Swedish broadcasting group could be its next possible target.
 
Dinnelind told TT that the firm would be making a "step-by-step" gradual exit from central Asia, adding that he was currently unable to predict how long that would take. He also told Swedish media that it was too difficult to estimate the value of its assets during this process.
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