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SEC calls for help from MTS in Uzbek probe

20 Mar 2014

Russian operator Mobile TeleSystems (MTS) has revealed that US investigators have asked the group to cooperate with investigations into Uzbekistan’s telecoms market, Reuters writes. The Securities and Exchange Commission (SEC) has requested that MTS provide ‘documents and information’ relating to its defunct Uzbek unit to aid the probe ‘into the activities of unaffiliated parties.’ Clarifying the situation, MTS’s CFO stressed that the Russian company was not the subject of the SEC’s scrutiny, commenting: ‘This offer is of a voluntary nature and concerns third parties’ activities.’ MTS remained tight-lipped as to whether it would comply with the SEC’s request.

As previously noted by CommsUpdate, authorities in Sweden, Netherlands, the US and Switzerland have launched investigations into allegations of money laundering and bribery in the Uzbek telecoms market. TeliaSonera and Vimpelcom have had the offices of their Dutch holding companies raided by investigators in relation to the probe, whilst Swiss law enforcement officials have opened a case against Gulnora Karimova – the daughter of Uzbekistan’s president, Islam Karimov – following the lifting of her diplomatic immunity late last year, when she lost her post as envoy to the United Nations (UN). Vimpelcom and TeliaSonera are believed to have paid bribes to the Karimov regime in order to gain access to the nation’s wireless market. Both groups acquired frequencies through Gibraltar-based company Takilant, known to be a front for Karimova.

For its part, MTS was removed from the Uzbek market in 2012 after its local unit MTS Uzbekistan (previously known as Uzdunrobita) had its licences cancelled by local authorities amidst accusations of money laundering, bribery and tax evasion. MTS has denied the allegations and claims to be the victim of a shake-down, intended to either extort money from the group or to illegally appropriate the cellco.

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