The charges related to bribes of at least $330m that the company made to a government official in Uzbekistan who was a family member of the country’s president and in a position to “exert significant influence over other Uzbek officials, causing them to take official actions to benefit Telia’s business in Uzbekistan”.
According to the US Securities and Exchange Commission, Telia and its Uzbec subsidiary Coscom used a shell company to make the payments which were disguised as payments for lobbying and consulting services that did not take place. The shell company was controlled by the Uzbec official.
The bribes enabled the company, which is part-owned by the Swedish government, to buy its way into the Uzbek telecommunications market in 2007.
“Corporate bribery is not just unfair and illegal,” commented Stephanie Avakian, co-director of the SEC’s enforcement division, “it has terribly corrosive effects on business, government and society.
“As this global settlement demonstrates, the SEC continues to work closely with our counterparts at home and abroad to expose and pursue such corruption.”
Under the settlement order, Telia paid out $457m to the SEC. It also paid a criminal fine of $508m to the US Department of Justice.
Some of these amounts could be offset by payments made in overseas settlements or proceedings brought by the Dutch Openbaar Ministerie or the Swedish Åklagarmyndigheten. Whatever happens though, the company has to make a combined payment to all four agencies of at least $965m.
Acting US attorney Joon Kim hailed the settlement as “one of the largest criminal corporate bribery and corruption resolutions ever”.
“Telia, whose securities traded publicly in New York, corruptly built a lucrative telecommunications business in Uzbekistan, using bribe payments wired around the world through accounts here in New York City.”
If companies choose to trade their securities on US exchanges, then they have to abide by US laws, he added. “Telia and Coscom refused to do so, and they have been held accountable in Manhattan federal court today.”