TeliaSonera accused over Azeri dealings

STOCKHOLM (Reuters) - Nordic telecoms operator TeliaSonera financed and aided the Azeri president's family in taking over the state's stake in Azerbaijan's largest telecoms company, receiving preferential treatment in return, a media report alleged.

The report, published on Wednesday by a group of Swedish media outlets and citing sources such as internal TeliaSonera documents, said the company appeared to have received licences and permits to operate in Azerbaijan in exchange for helping the ruling family.

TeliaSonera spokesman Henrik Westman told Reuters the company viewed the sale and purchase of the stake as a "strange"transaction and that material relating to it had been handed to Swedish prosecutors. "It raises a lot of question marks for us, and that is why we have turned it over to the prosecutor for him to decide on how to progress," Westman said.

Reuters sent detailed questions about the allegations to Azerbaijan's presidential administration, by both fax and email. There was no immediate reply.

The report, by Swedish news agency TT, a Swedish public service TV investigative programme and a body called the Organized Crime and Corruption Reporting Project, said one of TeliaSonera's holding companies bought the Azeri state stake in local telecoms company Azercell in 2008 at a heavy discount.

It said the holding company then forfeited the asset in a complex web of transactions, handing it to its partner Cenay Iletisim, which it said had close ties to the Azeri president's daughters Leyla and Arzu Aliyeva.

TeliaSonera Chief Executive Johan Dennelind was quoted as saying the company could neither rule out or prove the company had acted illegally. "That is why we have made the material available for the prosecutor," Dennelind said.

Dennelind had broached the subject at the company's annual shareholders' meeting in April. "Despite our persistent efforts, we still have not been able to get a clear picture of our co-owning partner in Azercell," he said at the time. "We assume since some time ago that we have a minority owner who is close to the ruling power in Azerbaijan."

Cenay Iletisim made at least 6 billion Swedish crowns (S$953 million) from the deal, the report said.

TeliaSonera's dealings in Azerbaijan are among a series of controversial areas for the company, which said in April 2014 it could not rule out that some of its actions in Eurasian markets had broken the law.

Authorities in Sweden, Norway, Switzerland, the Netherlands and the United States are investigating a TeliaSonera deal in Uzbekistan which led to the former CEO stepping down and several top executives leaving the company.

In the wake of the investigations into the Uzbek deal, Telia commissioned a review by law firm Norton Rose Fulbright in 2013 into its Eurasian businesses, focusing on Kazakhstan, Nepal, Azerbaijan, Tajikistan and Georgia, leading to its admission that some actions may have broken the law.

Swedish prosecutor Gunnar Stetler, in charge of Sweden's investigation into the Uzbek licence deal, told TT that Telia had turned over material regarding the dealings in Eurasia more than six months ago.