(Corrects to read “remains a board member”, paragraph 11)
By Anthony Deutsch and Eric Auchard
AMSTERDAM/LONDON, March 27 (Reuters) - Veon Chief Executive Jean-Yves Charlier resigned on Tuesday after three years during which he led the company through a period of upheaval and repositioned the telecom operator to become a new internet services provider.
Charlier’s duties will be temporarily assumed by Veon’s new chairwoman, Ursula Burns, who formerly headed Xerox and was the first African-American woman to head a Fortune 500 company. Burns will step back from board duties at some other firms.
Charlier steered the formerly Russian-based company known as Vimpelcom through tough financial times and a name change to Veon following a bribery scandal in Uzbekistan that was settled with Dutch and American authorities in 2016 for $795 million.
The now Amsterdam-based company said it was not changing its 2018 guidance for revenue, operating earnings and free cash flow. It is scheduled to report first-quarter results in mid-May.
Charlier will not renew his contract when it expires at the end of March, the company said. Burns, who praised Charlier for putting the company on a stronger footing, is set to become executive chairman and assume strategy and corporate duties until a replacement is found.
“I’ll be able to lead the company through this phase with some confidence,” Burns said in an interview. “Now we have to look for growth and transformation. That’s what we are doing.”
It also named Kjell Morten Johnsen as acting chief operating officer, a newly created role, in charge of overseeing day-to-day operations in the company’s 12 major markets. A Telenor veteran, he ran Veon’s major markets in Russia and Italy.
Burns said the search for a new leader was underway and would seek candidates in both the telecommunications and digital technology industries.
“We want to make sure we have someone who can fit in well and drive the type of expansion and transformation we are going through,” she said.
Transforming Veon’s core network infrastructure and billing systems to become more digital, tailoring its Veon mobile messaging app to conditions in specific markets and adding new online services will remain top priorities in 2018, she said.
Charlier’s resignation comes five months after the departure of Chief Financial Officer Andrew Davies, who left in September but remains a board member of Veon’s Italian operations. He has been replaced by Norwegian Trond Odegard Westlie, the former finance chief at A.P. Moeller-Maersk and Telenor.
A shake up under Charlier has trimmed thousands of jobs and improved financial health, but its new flagship Veon app has only been downloaded by roughly 8 million out of 240 million customers. Veon’s share price has fallen nearly 50 percent over the past 12 months.
“It has been a privilege to lead Veon through a critical period in its history,” Jean-Yves Charlier said. “The transformation creates a solid foundation for a positive path for the company in the years ahead.”
Veon’s messaging app, which is designed to compete with the likes of Facebook Inc’s WhatsApp and Rakuten Inc’s Viber, offers free services to customers via its mobile network without data charges.
The app has been introduced in Russia, Georgia, Ukraine and Pakistan since first being launched in Italy in late 2016. By the end of 2018, the company plans to have made it available in all its markets. (Reporting by Anthony Deutsch and Eric Auchard, editing by David Evans)