Lattelekom likely to lose State Audit appeal

The Latvian State Auditor looks poised to reject an appeal by Lattelekom of an apparently critical audit performed earlier this year. Some parts of the audit were leaked to a Latvian daily newspaper, Neatkariga Rita Avize, which made claims that former Lattelekom managing director Leena Suhonen and other managers had wasted funds and acted in favor of one owner, TeliaSonera, rather than the interests of the company. Lattelekom is owned 49 % by TeliaSonera and 51 % by the Latvian state.
Lattelekom has been audited by international auditors who gave the company a clean audit.
Lattelekom did not comment on these claims, nor did it disclose the content of the state audit, but appealed it earlier in the summer. The appeal was apparently based mainly on objections to the "jurisdiction" of the State Auditor, since Lattelekom says it is a commercial enterprise and not a ministry, agency or other entity spending public budget funds.
The State Auditor, sitting in an internal appeals proceeding, is expected to rule against Lattelekom in a ruling to be announced on Thursday, September 23. The Auditor will argue that Lattelekom comes under its mandate and that the company can be audited according to the principles applicable to government entity audits.
According to information availabe to this blogger, Lattelekom did not challenge any of the assertions in the audit report itself, assuming, instead, that they should be dismissed as invalid because the State Auditor had no mandate to make them.
The conflict illustrates one reason why Lattelekom might be better off as a 100 % private corporation, or at least with substantially less state ownership, so that it will not be audited by apparently conflicting methods and standards.