Uzbek telecom probes continue to grow

By bne IntelliNews March 18, 2014

bne -

The pressure on Uzbek telecoms operators continues to widen, as the US launched a probe into the activities of TeliaSonera in the country, the company announced on March 17.

The US Department of Justice and Securities and Exchange Commission (SEC) has launched an investigation into TeliaSonera's acquisition of a 3G licence in Uzbekistan. The Scandinavian telecoms giant is already under investigation in both Sweden and the Netherlands over its payment to a company linked to the Uzbek president's daughter Gulnara Karimova when obtaining the licence.

The announcement suggests an acceleration in action surrounding the Uzbek telecoms sector, which in turn is believed to be linked to a power struggle among the elite in the country. On March 12, US and EU investigations into Vimpelcom - a company controlled by Russia's Altimo and operating another major Uzbek mobile operator - were revealed.

TeliaSonera said in a March 17 statement that it has received requests from the US authorities for documents relating to its 2007 purchase of the 3G licence. Five days earlier, TeliaSonera announced that it was under investigation in the Netherlands.

"The common denominator for our contacts with the authorities is that we are asked for information about TeliaSonera's investments in Uzbekistan and documents related to these. TeliaSonera cooperates fully with all the authorities, as we are doing with the Swedish prosecutor, in order to gain full clarity on these issues," said Peter Borsos, head of group communications at TeliaSonera, in a statement.

Swedish prosecutors launched their own investigation into TeliaSonera, in which the Swedish state is a minority shareholder, in 2012, after journalists revealed the company had paid around $350m to Takilant, a Gibraltar-based company linked to Karimova, for its Uzbek 3G licence. The prosecutor in charge of the Swedish investigation said that he had asked the authorities in the US and other countries for help with the investigation, Reuters reports.

Since investigations were carried out both within the company and by state prosecutors, several TeliaSonera executives - including former CEO Lars Nyberg - have been forced to quit. The company's investigation found no evidence of bribery or money laundering, but criticised the investment process and said that insufficient effort had been made to investigate the local partner in Uzbekistan.

Meanwhile, Vimpelcom, is also under investigation in several countries. Anti-corruption authorities in both the US and the Netherlands launched a probe on March 12. When TeliaSonera first came under scrutiny for its dealings with Karimova back in 2012, Vimpelcom said it did not rule out that could also be investigated. It also revealed that Takilant held a minority interest in Vimpelcom's Uzbek operations between 2007 and 2009.

Meanwhile, Swiss public prosecutors say they are carrying out a money laundering investigation into Karimova which according to the BBC "involves the business activities of a Swedish telecoms firm." Karimova has been under investigation in Switzerland since September prosecutors said on March 12.

The daughter of President Islam Karimov is believed to be losing ground in the ongoing cloak and dagger tussle among Uzbekistan's elite. The struggle for position to succeed Karimov - who has ruled with an iron fist since independence - has seen Karimova's businesses and allies meeting increasing difficulties.

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