Clarification on financial reporting etc
Recently, TeliaSonera’s accounting and handling of historical transactions has been criticized by a US hedge fund. In addition to information provided in the press release on October 15, TeliaSonera would like to make the following statement:
Accounting and financial reporting
TeliaSonera’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) and the disclosures in the annual report provide adequate and sufficient information in accordance with IFRS and the Swedish Annual Accounts Act.
Our auditors, Deloitte, have reviewed our financial reports and have not identified any new information that causes them to believe that the consolidated financial statements for 2014 or the 2015 interim reports issued should have been presented in a different way. The 2014 consolidated financial statements were audited by Deloitte with an unmodified audit opinion. Deloitte has also submitted a limited review report on the third quarter 2015 interim report, which is released today.
Regarding acquisitions of assets and operations in Eurasia, accounting for put options and provision for potential actions from the U.S. Department of Justice (“DoJ”) or other competent authorities, TeliaSonera’s conclusion is that IFRS is correctly applied in these areas and provides the following comments:
- Acquisitions of assets and operations – it is to be noted that the accounting treatment, to either expense the acquisition costs as incurred or to recognize a full impairment charge is not acceptable under IFRS.
- Accounting for put options granted to minority shareholders – TeliaSonera’s accounting treatment on this is in accordance with the IFRS principles and the applied accounting treatment has been clearly stated when describing our accounting principles in the annual reports.
- Recognizing a provision for potential actions taken by DoJ or other competent authorities – TeliaSonera, as of today, has not received any claims from any authority. It is only if and when formal or informal obligations which meet the IFRS criteria occur that it is possible to recognize any provisions.
On September 17 this year TeliaSonera announced its ambition to reduce the presence in Eurasia and over time leave. The decision was not taken in haste, it was based on thorough analysis and process. One important reason for the decision was that the Board and management of TeliaSonera, which took office in 2013, have inherited partner relationships that the company would not have chosen today, and that the ultimate beneficiary owners of minority shareholders in Azerbaijan and Uzbekistan, remain unknown. No dividend has been paid out in either of these two countries during 2014 and 2015 and no decisions regarding future dividend payments have been taken.
Extensive information on developments in Eurasia and actual findings has been communicated continuously, including information which according to listing requirements should be made public.
We have received requests to make public the review made by the law firm Norton Rose Fulbright which was finalized in March 2014. As we have stated many times before, it is not possible to publish the review with respect to people, companies, business agreements, privacy and thus the risk of TeliaSonera incurring law suits as Norton Rose Fulbright’s view is not necessarily shared by those implicated. We continuously hand over information to law enforcement agencies, who are better equipped to assess whether any criminal acts have occurred.
Deloitte has access to the same information as the company, including the information provided to the investigations underway in Sweden, the US and the Netherlands as well as internal reviews made of the activities of the Eurasian region, including the Norton Rose Fulbright review.
April 17, 2013; Announcement of Norton Rose Fulbright review;
Sept 11, 2013; Announcement of exit from Nepal Satellite
Nov 29, 2013; Announcement senior employees leave
March 12, 2014; Dutch investigation initiated;
March 17, 2014; Update on investigations;
Apr 2, 2014; Chair’s speech AGM 2014;
Apr 2, 2014, Summary of NRF review;
Sept 29, 2014; Investigations in Kcell
Dec 9, 2014; Statement from the Board of Directors
Sept 17, 2015; TeliaSonera not a long term owner in Eurasia