European Commission to investigate TeliaSonera deals in Russia
Commission to examine if officials misled
Jeffrey Galmond
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The European Commission is to investigate whether or not the telecommunications service provider TeliaSonera has give false information to the EU over a deal with First National Holding six years ago.
Telia used the company to acquire partial ownership of the Russian mobile operator Megafon.
The ownership of FNH is part of a complicated arrangement in Megafon. It allowed TeliaSonera to get voting and ownership rights in Telecominvest, which owns shares of Megafon.
TeliaSonera currently holds 26 percent of the shares of Telecominvest.
Telia acquired FNH in a directed share issue with the help of Germany’s Commerzbank. The price of the deal was 80 million US dollars.
Later the bank said that it had operated on behalf of Danish lawyer Jeffrey Galmond, who was the real owner of FNH.
Now Telia is claimed to have known already as the deal was being made that FNH’s real owners had been Jeffrey Galmond, although in a statement given at the time to officials, Commerzbank had been designated as the owner.
The matter is made more complicated by the fact that serious questions have been raised over the position of Jeffrey Galmond. Mr. Galmond himself says that he owns both Telecominvest and another company, IPOC, which has an eight percent holding in Megafon.
The European Commission became interested in the matter at the initiative of Swedish conservative MEP Christofer Fjellner.
"The Commission will contact the lawyers of the parties in question in order to examine the situation. If false or deceptive information emerges, the original application will be rejected, and the parties will have to submit a new application. The Commission can also impose fines, which can be up to one percent of turnover", said the European Commissioner for Competition, Neelie Kroes in an answer to Fjellner.
According to TeliaSonera, the FNH deal was made in good faith.
"When we did business with Commerzbank, which is a well-known German bank, it presented itself as the owner, and we had no reason to doubt the matter", said Michael Kongstad, information officer of TeliaSonera to Helsingin Sanomat.
He also said that the answer given by Commissioner Kroes is a standard response to an MEP’s question. "So far, nothing else has happened. The Commission has not been in contact with us yet."
The interest of the Commission was the main news item in the Saturday edition of the Swedish business newspaper Dagens Industri, and was featured prominently in Sweden’s main dailies on Sunday.
Helsingin Sanomat
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| 28.3.2006 - TODAY |
 European Commission to investigate TeliaSonera deals in Russia
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