November 9, 2015 / 8:17 AM / 4 years ago

UPDATE 1-Telenor ends consultancy deal with former CEO due to Vimpelcom probe

* Consultancy deal terminated by mutual understanding

* Ex-CEO gives up his right to a 2015 bonus (Adds quotes, detail, background)

OSLO, Nov 9 (Reuters) - The board of Norwegian telecoms operator Telenor has terminated a consultancy agreement with former chief executive Jon Fredrik Baksaas due to the continuing police investigation at affiliate Vimpelcom, the company said on Monday.

The relationship was ended by mutual agreement and Baksaas has also notified the board that he would waive his bonus payment for 2015, Telenor said in a statement.

Vimpelcom, where Telenor owns a 33 percent stake and Baksaas was a former board member, is under investigation by police in Norway, the Netherlands, Switzerland and the U.S. over payments made in connection to its business in Uzbekistan.

Baksaas stepped down as chief executive of Telenor in August after 13 years at the helm.

“The recent developments in the ongoing investigations of Vimpelcom make my role as strategic advisor to the board in Telenor challenging. I have dedicated my career to Telenor and find the situation very unfortunate, complex and sad for the company,” the former CEO said in the statement.

“It is vital that Telenor’s management and board of directors now have room to handle the situation effectively,” he added.

Baksaas left the board of Vimpelcom in December 2014, having been a member of the board since 2010.

The Norwegian government, which holds a 54 percent stake in Telenor, said on Oct. 30 it had lost faith in then-chairman Svein Aaser due to his handling of the Vimpelcom case, prompting Aaser’s resignation from the board.

The company has since hired a law firm to review its relations with Vimpelcom.

“Although it is Vimpelcom that is under investigation and Telenor is cooperating with the investigating authorities as a witness, questions have been raised about what information the Telenor Group had about the alleged corruption in Vimpelcom,” Telenor’s acting chairman Frank Dangeard said on Monday.

“I am pleased that the board and Baksaas have reached a mutual agreement to terminate the consultancy agreement,” he added.

The former CEO will retain his shares in Telenor that were awarded to him under the firm’s long-term incentive scheme, the company said.

On Nov. 3 Vimpelcom announced it had made a $900 million provision in relation to the Uzbekistan investigation.

Norwegian police last week apprehended former Vimpelcom Chief Executive Jo Lunder for questioning in the case. A court ruled on Friday that there was no strong evidence to suspect him of corruption, but said he should remain in custody pending an appeal against his release. (Reporting by Terje Solsvik; Editing by Greg Mahlich)

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