Naubet Bisenov in Almaty -

The chief executive and chief financial officer of Kcell, a subsidiary of TeliaSonera of Sweden, have both resigned, following the opening of a probe into some of the  contracts of  Kazakhstan's largest mobile operator.

Kcell said on October 1 that  Chief Financial Officer Baurzhan Ayazbayev had resigned, a day after Chief Executive Officer Ali Agan resigned from his post. Agan's resignation was announced on September 12.

On September 29, Kcell announced that certain contracts the company had concluded with external suppliers had been made in breach of internal procedures and policies. "In connection with this, the board of directors has opened a probe into these contracts and procedures to conclude them involving internal and external resources," the statement said.

"Initial results of the investigation have led to the board of directors deciding to expand the boundaries of the external investigation and involve additional resources," it added.

The company ruled out that the investigation would have any impact on the company's financial performance. But in a commentary on October 2 Russia's Sberbank said the resignations are  "likely to raise concerns" and since the outcome of the investigation was still unknown "the risks remain". Sberbank didn't elaborate what the risks were but said "the fact that the company is now operating without either a CEO or CFO is mildly negative".

Kcell was not able to either confirm or deny the link between the resignations and the investigation. "At the moment we can neither confirm nor deny whether there was any connection with the suspected breaches of the internal policies," a spokesperson for the company told bne.  "Both top managers resigned from Kcell of their own accord. The company is conducting an internal investigation which will establish the facts."

The spokesman said the board of directors was now "actively" looking for new candidates. "The quality of the appointments is of utmost importance, but the board recognises that the company needs to appoint permanent managers as soon as possible," the spokesman told bne.

Following a scandal over TeliaSonera's business dealings in Uzbekistan, in April the Nordic telecom giant said it could not rule out that its subsidiaries in other Eurasian markets had broken the law. In 2012 Swedish prosecutors opened a probe into bribery allegations linked to the firm's acquisition of a 3G licence in Uzbekistan.

"The board can unfortunately say that several transactions and practices have not been handled in accordance with good business practice," chairwoman Marie Ehrling said in remarks carried by Reuters. "It cannot be excluded that certain actions have been criminal."

The probe focused on Kazakhstan, Nepal, Azerbaijan, Tajikistan and Georgia, Reuters said.

TeliaSonera's Kazakh unit, Kcell, is listed on the Kazakhstan Stock Exchange (KASE) and LSE. According to KASE, TeliaSonera holds a 24% stake in Kcell.  Fintur Holdings, in which TeliaSonera has a 74% interest, owns a further 51%.

TeliaSonera entered the Uzbek market in 2007 by acquiring 100% in the American MCT Corp, which held stakes in the Uzbek telecom operator Coscom which was rebranded as Ucell in 2008. TeliaSonera now holds a 94% in Ucell.