TeliaSonera and Turkcell sold their stakes in an Azerbaijani mobile operator presumed to have been dubiously privatized by President Ilham Aliyev’s family which may have earned as much as US$ 1 billion from the corrupt deal.
The scandal erupted after OCCRP revealed a complicated web of offshore and business records that connect Azercell, the company’s largest mobile provider, to the Aliyev daughters.
The Swedish telecom giant announced on Monday that the 51.3 percent it owns together with Turkcell in Azertel – the sole shareholder in Azercell – were sold to state-owned Azintelecom for 222 million euros (US$273.50 million) - a sum regarded to be way below the real value of the shares.
“It is satisfying that we are able to announce a joint agreement with Turkcell to sell Azercell in Azerbaijan,” the statement cited Johan Dennelind, President and CEO of Telia Company.
He said Telia was leaving Eurasia and will focus only on the Nordic and Baltic regions.
The company came under fire after in 2014 OCCRP revealed that at least 42 percent of Azercell Telecom were linked to Aliyev’s daughters through Panamanian companies. The shares were acquired during the 2008 privatisation of the state’s portion in the Azerbaijani telecom company and were never paid for.
The companies linked to Aliyev’s daughters may have benefited as much as US$ 1 billion in the takeover.
The deal was facilitated through a subsidiary of TeliaSonera, which acted against its own interest. Azerbaijan also suffered a loss. The state’s share was worth $785 million but was sold for just $ 180 million.
TeliaSonera, which owned a majority share of Azercell, also agreed to dilute its ownership and turn down dividends in exchange for Azercell receiving all required regulatory approvals and licenses to operate in Azerbaijan, according to internal documents from an early version of the deal. A former financial investigator who reviewed the findings called it possibly the largest bribery in Swedish history.
This was the second time TeliaSonera was embroiled in a corruption scandal. Previously, reporters of SVT, OCCRP and TT discovered that the company may have paid bribes to a member of the ruling family of Uzbekistan.
In March 2018, Azercell published its financial report, announcing unprecedented loss in 2017 as a result of unspecified “short term investments.”
In his Facebook post telecommunication expert Osman Gunduz wrote that the company had failed to address the details concerning the 2017 financial loss but Telia Company said it was satisfied with all the relevant controls.
“Azintelecom is a buyer in line with Telia Company’s requirements as it is a company wholly owned by the sovereign state of Azerbaijan,” Telia’s statement said, adding that the transaction has already been completed.