Feud Over Headquarters Rattles Nordic Telecom
- By Alister Doyle
- Dec. 14 1999 00:00
OSLO, Norway -- The Norwegian head of Nordic telecoms group Telia-Telenor has rejected Swedish pressure for him to resign amid a cross-border crisis that could even threaten Norway's government.
"I'm prepared to keep going," chief executive Tormod Hermansen was quoted as saying Sunday by the daily Aftenposten.
Swedish chairman Jan-Ake Kark said Friday that Hermansen should either resign or drop opposition to a disputed board vote on where to locate key divisions of the new firm, estimated by analysts to be worth about 400 billion Swedish kroners ($47.3 billion).
The two countries are in open verbal war after a vote Wednesday to establish the newly merged group's prized mobile telephone division f worth an estimated 250 billion Swedish kroners f near Stockholm rather than near Oslo.
The controversial siting decision was made last Wednesday when Kark made a double-casting vote as chairman after the board was deadlocked with six Norwegians versus six Swedes. The Norwegians insist Sweden cannot force through votes on key issues without the backing of at least one Norwegian.
Analysts say the tensions, if unresolved, might end up toppling Norway's centrist government, headed by Prime Minister Kjell Magne Bondevik. Bondevik has publicly sided with Hermansen in rejecting the outcome of the controversial vote, where the 12-member board was split down the middle on national lines.
"Tele farce can topple Bondevik," the daily Dagbladet said in a front-page headline.
"The government will survive or fall depending on whether the Norwegian interpretation of the agreement is correct," Per-Kristian Foss of Norway's opposition Conservative party told the daily Verdens Gang.
Both Kark and Hermansen say it is now up to the shareholders of Telia-Telenor f the Swedish and Norwegian governments f to resolve the latest row to hit the cross-border merger, which plans to launch the Nordic region's biggest float in April.
Norway's transport minister, Dag Fjaeruoll, was to speak with Sweden's industry minister, Bjorn Rosengren, on Monday.