We are short the securities of TeliaSonera (TLSN.ST) 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).
Muddy Waters writes an open letter to the board of directors of TeliaSonera AB explaining why we are short.
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