Calling Party Pays: the hunt for USD 1 bln in assets in Uzbek telecoms probe
By Chris Weston, CEE Consulting Group.
US and European authorities are seeking to seize about USD 1 bln of assets relating to an investigation into alleged corruption by three global telecom companies as well as entities closely linked to the daughter of the Uzbekistan leader.
US and European authorities believe that between 2004 and 2011, Gulnara K., the eldest daughter of Uzbek President Islam Karimov, helped Swedish based TeliaSonera AB, Vimpelcom (an Amsterdam-based, Russian owned company) and MTS (the telecoms subsidiary of Russian based Sistema), gain wireless frequencies and blocks of phone numbers to operate in Uzbekistan in exchange for alleged bribes paid to a web of front companies run by individuals close to Ms Gulnara K.
Rather than pay bribes directly, the multinational companies would sell stakes in their Uzbek entities to entities linked to Ms Gulnara K. These share stakes would later be repurchased by the multinationals at a significant premium. In essence, the premium constituted the amount of the alleged bribe, according to US authorities.
One of the main recipients of alleged bribes was Takilant Ltd, a company registered in the British ruled Gibraltar. It is alleged that in June 2007, Vimpelcom sold a 7-percent stake in its Uzbek subsidiary, Unitel, to Takilant, for USD 20 mln. In September 2009, Vimpelcom bought back this same 7-percent shareholding for USD 57.5 mln.
Takilant`s sole shareholder was Gayene A., an Uzbek national who has been a long-term business associate of Ms Gulnara K.
In February 2014, Gayene A. was arrested by the Uzbek authorities at Ms Gulnara K.`s house and subsequently sentenced to six years` imprisonment.
The US Justice Department has confirmed that it intends to seize USD 300 mln in Ireland, Belgium and Luxembourg. In March, the US requested Sweden to assist in seizing USD 30 mln in a Swedish bank account. Similar steps to freeze USD 640 mln of assets, including a lakeside villa, have also been undertaken in Switzerland.
Both MTS and Vimpelcom, despite being essentially Russian businesses, trade securities in the USA and thus would fall within the purview of the US authorities. TeliaSonera, despite delisting its securities ten years ago, may still be subject to US oversight due to any dealings or transactions with the US financial system.
According to some reports, since 2014, Gulnara K., self-described as a â€śpoet, mezzo soprano, designer and exotic Uzbekistan beautyâ€ť and, at one time, the country`s Permanent Representative to the United Nations in Geneva, has been under house arrest in her own country.
This case would appear to be of interest in that the US authorities appear not only to be going after US based assets of overseas figures â€“ e.g. the son of the President of Equatorial Guinea, Teodoro “TeodorĂn” Nguema Obiang, attracted particular scrutiny for money laundering in the USA, but of actively cooperating with foreign countries in a worldwide search for the spoils of corruption.
Photo courtesy of www.kremlin.ru (Wikimedia Commons).