Authorities in the Netherlands and Switzerland have opened up investigations into allegations of money laundering and bribery by European-based companies operating in Uzbekistan. The offices of Dutch holding companies owned by Russian-backed Vimpelcom and Sweden’s TeliaSonera were raided yesterday by local authorities, whilst Swiss prosecutors have opened a related case against the daughter of Uzbek president Islam Karimov, Gulnora Karimova. Amsterdam-headquartered, US-listed Vimpelcom announced yesterday that it was under investigation from Dutch authorities and the US Securities and Exchange Commission (SEC) regarding its Uzbek business, whilst TeliaSonera today revealed that its offices had also been raided yesterday by Dutch prosecutors. Official details remain scant, but both groups have had dealings with Gibraltar-based company Takilant, a known front for Karimova, and Swiss prosecutors have confirmed that their colleagues in Sweden are involved in a corruption investigation related to a Swedish enterprise’s acquisitions in the Uzbek telecoms market.
TeliaSonera came under scrutiny from Swedish authorities in late 2012 in connection to its operations in Uzbekistan, after a TV documentary unearthed connections between the state-backed company and the Karimov regime. It subsequently emerged that Takilant, then owned by Gayane Avakyan, a former aide to Karimova, had served as an intermediary for the group’s entry into the market, with TeliaSonera paying out around USD300 million to the middle-man for 3G spectrum rights in 2007. Whilst the company’s own investigation into the matter found that the group had not deliberately committed bribery, or participated in money laundering and blamed poor background checks for the outcome, documents came to light in May 2013 suggesting that Karimova had had a direct hand in negotiations with the Swedish firm, including a request for USD15 million for Karimova to ‘escort’ TeliaSonera through five separate regulatory bodies. According to TeleGeography’s GlobalComms Database, a former CFO at Ucell, TeliaSonera’s Uzbek unit, further damned the telco, revealing that the operator frequently made donations to charitable organisations as a vehicle for paying bribes, usually coerced from the company: ‘Once in a while … down goes the switch and all of a sudden we lose a hundred base stations. We would have thousands of subscribers screaming about why they don’t have their service. So after two or three days we have to make a USD100,000 payment to a charitable organisation, at the choice of whomever.’ Acting CEO Per-Arne Blomquist was quick to dismiss the accusations in early 2013, denying any nefarious aspect to the company’s sponsorship of charities and cultural initiatives, such as Fund Forum and Style.uz respectively, both with strong ties to Karimova.
Vimpelcom’s involvement with Takilant is not as well documented, although the group acknowledged in its 20-F filing to the SEC in March last year that Takilant had held a minority stake in its Uzbek subsidiary Beeline from 2007-2009 and that it had worked with Takilant to acquire frequencies in Uzbekistan. Vimpelcom warned that it could give no assurances that it would ‘not become subject to investigations, face liability or suffer reputational harm’ as a consequence of its dealings with Takilant.
Meanwhile, the BBC writes that Karimova had her diplomatic immunity lifted last year when she lost her post as Uzbekistan’s envoy to the UN. Switzerland’s public prosecutor revealed that the businesswoman and popstar had been under investigation since September 2013, adding that her diplomatic immunity had previously prevented any action being taken against Karimova. Alongside Karimova, four Uzbek nationals are involved in the inquiry and CHF800 million (USD912.6 million) has been frozen as part of the probe.