VimpelCom's Russian Boss Makes Beeline for Exit
Mikhail Slobodin has quit as CEO of VimpelCom's Russian subsidiary Beeline amid reports he is under investigation for corruption at T Plus, a former employer in the energy sector.
Headquartered in Amsterdam and with operations across a number of emerging markets, VimpelCom Ltd. (NYSE: VIP) issued a brief statement on Slobodin's ignominious departure late on Monday.
"VimpelCom today announces that it has accepted the resignation of Mikhail Slobodin, CEO of VimpelCom Russia, with immediate effect, following today's news regarding Mikhail Slobodin and his prior employer T Plus," said the company.
While details of the alleged abuses at T Plus are thin, Slobodin is bound to have come under immediate pressure to tender his resignation.
VimpelCom's reputation has already taken a pounding from charges of corruption in central Asia, forcing the company to pay an $800 million fine earlier this year, and a fresh scandal is the last thing it needs as it tries to clean up its act. (See Eurobites: 'Uzbekgate' Costs VimpelCom $795M.)
The operator, Russia's third-largest cellular operator with more than 58 million customers for a 22.5% market share, according to Ovum Ltd. 's World Cellular Information Service (WCIS), has wasted no time in naming a successor. Kjell Johnsen, who joined VimpelCom as recently as August 2016 as head of major markets, will take over with "immediate effect," said the company.
The investigation into Slobodin seems connected to broader charges of bribery that Russian officials have leveled at employees of Viktor Vekselberg, the owner of T Plus and the latest billionaire businessman whose activities have incurred the displeasure of the Kremlin.
According to a report from Reuters, employees of Vekselberg are accused of bribing regional administrators to set favorable energy tariffs.
Vekselberg is not the first tycoon to fall foul of Russian officials close to President Vladimir Putin. Most famously, Mikhail Khodorkovsky, the former CEO of energy giant Yukos (now bankrupt), was imprisoned between 2005 and 2014 after being charged with fraud.
Slobodin's resignation is particularly interesting in light of VimpelCom's current ownership structure.
The operator's biggest shareholder is an investment fund controlled by Mikhail Fridman, reckoned to be Russia's second-richest man.
Not thought to be close to Putin's inner circle, Fridman will have been keen to distance himself from any connection with Vekselberg in the wake of the latest allegations, and may have leaned on VimpelCom to force Slobodin out.
News of Slobodin's resignation comes shortly after Fridman made a $50 million investment in FreedomPop, a California-based mobile virtual network operator that is keen to expand into emerging markets. (See Eurobites: Russian Billionaire Pumps $50M Into FreedomPop.)
FreedomPop may be able to rely on VimpelCom's network in a number of central and southeast Asian markets, but the startup's innovative practices could also benefit the Russian operator.
Besides trying to improve its corporate reputation, VimpelCom is also looking to effect a "digital transformation" through investment in new technologies and skills. (See Could FreedomPop Unshackle VimpelCom?)
— Iain Morris, , News Editor, Light Reading