Telia settles U.S., European bribery probes for $965.8 million

NEW YORK (Reuters) - Telia Co TELIA.ST agreed to pay $965.8 million to settle U.S. and European criminal and civil charges that the Swedish phone company paid bribes to win business in Uzbekistan.

Thursday’s settlements, including an Uzbek unit’s guilty plea to a bribery charge, resolve probes by the U.S. Department of Justice, the U.S. Securities and Exchange Commission and Dutch prosecutors of the Stockholm-based company.

Telia’s U.S. criminal settlement is the first major resolution of a foreign bribery case under the Foreign Corrupt Practices Act (FCPA) since Donald Trump, who has called that statute a “horrible law,” entered the White House.

More than half of the payout, $548.6 million, represents criminal penalties.

Telia said the accords resolve all known corruption-related investigations of the company, although Swedish prosecutors are still investigating possible misconduct by individuals.

“Today’s settlement brings an end to an unfortunate chapter in Telia Company’s history,” Chief Executive Johan Dennelind said.

Authorities said Telia and its Coscom LLC unit in Uzbekistan conspired to pay an Uzbek government official $331.2 million in bribes from 2007 to 2010 for help in entering and expanding their share of the country’s telecommunications market.

The SEC said bribes were funneled through payments for sham lobbying and consulting services to a company controlled by the official, who in December 2007 was given a 26 percent stake in a holding company for Coscom.

Authorities said the corruption enabled Telia to reap more than $457 million of illegal gains and $2.5 billion of revenue.

Telia agreed to enter a three-year deferred prosecution agreement with the Justice Department, while Coscom pleaded guilty to one count of conspiring to violate the FCPA.

Deferred prosecution agreements let companies avoid criminal charges so long as they comply with the terms.

According to Telia’s agreement, the company will monitor and where necessary improve its compliance program and internal controls, and has already terminated everyone involved in the misconduct, as well as their supervisors.

“The company deeply regrets its historical conduct engaged in by former management,” David Stuart, a lawyer for Telia, told U.S. District Judge George Daniels at a hearing in Manhattan.

Telia had estimated in April that the settlements might cost about $1 billion.

In February 2016, Amsterdam-based VimpelCom, now called Veon Ltd VON.AS, reached $795 million in settlements to resolve U.S. and Dutch bribery probes related to Uzbekistan.

Founded in 1853, Telia has a presence in 14 countries and in Europe has mobile, broadband, TV and fixed-line operations in Sweden, Denmark, Finland, Norway, Estonia, Latvia and Lithuania.

Reporting by Jonathan Stempel and Brendan Pierson in in New York; and Johannes Hellstrom, Anna Ringstrom and Olof Swahnberg in Stockholm; Editing by Bernadette Baum and Dan Grebler