- REUTERS/Benjamin Myers
Influential short-seller Carson Block is short TeliaSonera, a large telecom company based in Sweden.
Block has released a blistering 37-page open letter to the company’s board.
The letter makes multiple serious allegations, including that the company has potentially made corrupt payments in Eurasia.
Here’s the intro to the letter:
We are short the securities of TeliaSonera because we believe information that is being withheld from investors, along with the current board and management’s (in)actions, will significantly impact the company’s shares and credit profile. While TeliaSonera has provided some transparency into its misdeeds in Uzbekistan, it has not made public the likelihood that the company’s other Eurasian and Nepal operations suffer from similar problems, and on a massive scale. It appears that TeliaSonera made corrupt payments in Uzbekistan exceeding SEK 3.1 billion (US$380 million). Uzbekistan appears to be only the tip of the iceberg. We estimate – perhaps conservatively – that TeliaSonera could have made corrupt payments throughout its Eurasia and Nepal operations that exceed SEK 17 billion (US$2.1 billion). In addition, TeliaSonera is potentially obligated to make additional payment to a problematic partner in Azerbaijan of up to SEK 7.6 billion (US$934.5 million).
Shares of TeliaSonera fell as much as 6%.
Block is the founder of the San Francisco-based Muddy Waters Research. He’s best known for spotting and targeting Chinese frauds.
TeliaSonera released the following statement:
Today an open letter addressed to the TeliaSonera Board has been published by a US based fund in which it claims to be short in the TeliaSonera stock. The fund directs serious criticism towards the company. TeliaSonera does not recognize the conclusions and makes the following statements today:
- As previously reported TeliaSonera fully cooperates with ongoing investigations in Sweden, the Netherlands and the United States. TeliaSonera is as open and transparent as possible with respect to listing requirements and the investigations. TeliaSonera has of today not received any claims from US authorities. It is only if and when any claims materializes that it is possible to make any provisions in the financial statements. TeliaSonera’s financial statements are in accordance with International Financial Reporting Standards (IFRS). They are audited by Deloitte in accordance with International Auditing Standards IAS and TeliaSonera has received unmodified audit opinions 2014.
TeliaSonera AB discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instrument Trading Act. The information was submitted for publication 2.15 p.m. CET on October 15, 2015.