NEW YORK, March 8 (NNN-AGENCIES) – US prosecutors Thursday reached an $850 million settlement with Russia’s leading telecoms firm over huge bribes paid to the family of Uzbekistan’s former president — and charged the late leader’s daughter in related proceedings.
The case shed light on massive corruption in Uzbekistan under former
president Islam Karimov, who ruled the ex-Soviet republic from 1990 until his death in 2016.
MTS, based in Moscow and listed on the New York Stock Exchange, said the
settlement had been agreed with the US Justice Department and the US
Securities and Exchange Commission (SEC).
The deals “mark the closure of the investigations into the company’s
acquisition and operation of its former subsidiary in Uzbekistan,” MTS said
in a statement.
In agreeing to the fine “MTS affirmed its commitment” to complying with
anti-corruption legislation, it said.
Charges were also filed against the late president’s daughter Gulnara
Karimov in connection with a decade-long scheme to pay her more than $865 million in bribes, one of the largest cases ever brought under the Foreign Corrupt Practices Act, prosecutors said in a statement.
Karimova, former Uzbek ambassador to the United Nations, is charged with
one count of conspiracy to commit money laundering, along with Bekhzod
Akhmedov, 44, former general director of Uzdunrobita, an Uzbek subsidiary of MTS.
Akhmedov, who lives in Russia, allegedly helped orchestrate the graft
scheme on behalf of MTS and two other telecom firms, VimpelCom Ltd of Russia and Sweden’s Telia Company AB, and their Uzbek subsidiaries.
“Between approximately 2001 and 2012, Karimova and Akhmedov agreed that Akhmedov would solicit and obtain corrupt bribes for Karimova from
telecommunications companies,” the US Attorney’s Office for the Southern
District of New York said in a statement.
MTS was in a long-running dispute with the Uzbek authorities, which seized
the company’s local subsidiary in 2012 after cancelling its operating
licenses for alleged tax evasion.
The Uzbek subsidiary, which had 9.5 million subscribers by the end of 2011,
filed for bankruptcy in 2013.
The SEC said that MTS had “bribed an Uzbek official” related to Karimov to
obtain and retain business operations in Uzbekistan, a Central Asian nation
of more than 32 million people.
“The company engaged in egregious misconduct for nearly a decade, secretly funneling hundreds of millions of dollars to a corrupt official,” the SEC said in a statement.
An investigation by the Organized Crime and Corruption Reporting Project
previously said that the subsidiary, which was known as Uzdunrobita before it was acquired by MTS, had paid hundreds of millions of dollars to companies owned by Gulnara.
The OCCRP, an NGO that works with investigative reporters mainly in Eastern Europe, alleged that MTS made payments in 2004 and 2007 to purchase stakes in the company.
MTS was not the only telecoms company involved. “Karimova squeezed more than $1 billion worth of payments… out of international telecom-related companies,” OCCRP said.
Some commentators in Russia expressed dismay that the US was fining Russian companies for operations in third countries.
“What concern does the US have about the far away Uzbekistan and Russian operators?” said a journalist on BFM business radio, pointing out that “the money will go to the American budget, not the Uzbek one.”
Uzbekistan is led by Karimov’s former prime minister Shavkat Mirziyoyev,
who has moved to end the country’s economic isolation and removed visa
restrictions for travelers from European Union countries and the United
States.
Gulnara Karimova, once a high-profile diplomat and pop singer, was being
held under house arrest after being convicted on fraud and money laundering charges in 2017 and sentenced to five years.
Uzbek authorities this week said she had violated the terms of her house
arrest and had been sent to prison where she would remain until the end of
her sentence. — NNN-AGENCIES
