TeliaSonera is back in the public eye over allegations of corrupt payments after financial research firm Muddy Waters said it was shorting the operator.
In an open letter to the operator’s board, Carson Block, co-founder of US-based Muddy Waters, said he was sceptical about the operator’s future financial performance because of allegations of unscrupulous payments made in Central Asia.
Speaking to Bloomberg, Block said that Muddy Waters had access to “a list of payments” made by the telco in Eurasia totalling approximately $2 billion (€1.8 billion) that made “no commercial sense.”
TeliaSonera exited from the region last month, saying it wanted to focus on its European operations. It said yesterday it was fully cooperating with investigations into its conduct.
The operator has been rocked by allegations of corruption in its Eurasian businesses in recent years, which has led to the dismissal of a number of high-ranking executives.
Meanwhile in Kazakhstan, an investigation is under way into allegations that former senior-level employees of Telia’s Kcell opco were involved in fraudulent transactions.
Carson Block told Bloomberg: “It’s known that this company has some problems, but they’re far worse than investors seem to understand.
This relates to widespread corruption that had occurred in pretty much every one of its markets which was operating in Central Asia.
“Telia, I presume, has much better information about what has transpired than its given the markets. We have a list of payments that were made in numerous countries that in many ways make no commercial sense. This payments total about $2 billion. We think there’s a good chance that these are corrupt payments.
“It’s impossible to say which ones are corrupt, but Telia needs to provide a lot more information to investors in order for them to make decisions about this.”
Shares of TeliaSonera fell as much as six percent following Muddy Waters’ accusations.
Meanwhile, the operator has denied claims that it is withholding information.
In a statement to the press, Telia said it “does not recognise the conclusions” made by Muddy Waters and added its financial statements are made in accordance with International Financial Reporting Standards.
The operator said: “As previously reported, TeliaSonera fully cooperates with ongoing investigations in Sweden, the Netherlands and the United States. TeliaSonera is as open and transparent as possible with respect to listing requirements and the investigations.
“TeliaSonera has of today not received any claims from US authorities. It is only if and when any claims materialises that it is possible to make any provisions in the financial statements.”