Authorities in Uzbekistan have arrested the acting general director of part US-owned carmaker GM Uzbekistan on suspicion of embezzlement, RFE/RL’s Uzbek service has reported.

Ozodlik cited an unnamed source on June 23 as saying that Rustam Rajabov is suspected of appropriating large amounts of money through “an illegal scheme during the export of cars to Russia.”

The company’s previous general director, Tohirjon Jalilov, was detained in late April over what was rumored at the time to be suspicions of a scheme to resell Ravon models intended for export on the local market. Since the vehicles sell for higher prices in Uzbekistan than in Russia, where the GM Uzbekistan exports much of its goods, it is believed the management were pocketing the difference.

Rajabov was appointed acting general director on May 10.

A Tashkent-based reporter familiar with the details of the case told EurasiaNet.org that investigators say they traced 10,900 vehicles intended for export being stored in the city of Shymkent, just across the border in Kazakhstan. The thinking is that the cars were to be brought back into Uzbekistan.

“The preliminary assessment of damages in $285 million,” the reporter told EurasiaNet.org.

GM Uzbekistan’s Ravon Gentra model retails for $6,500 in Russia and Kazakhstan, but costs $12,500 to buy in Uzbekistan, where demand is high and waiting lists to buy cars long. Another popular model, the Ravon Cobalt, costs $6,000 abroad and $12,000 on the domestic market. 

GM Uzbekistan, a company with a 25,000-strong staff and an annual turnover estimated at around $4 billion, consists of a joint venture between Uzbekistan's UzAvtosanoat (75 percent) and US giant General Motors (25 percent).

There is a view that whatever malfeasance was occurring at GM Uzbekistan might have been allowed to proceed if had not been for the knock-on impact on the domestic currency. Some local economic observers have put the erratic tribulations of the local currency, the som, in part down to a shortage of dollars provoked by the need for car buyers to pay in foreign funds for their purchases.

"Jalilov was taken into custody after the personal intervention of President Islam Karimov. Jalilov encroached on the most sacred area of the Uzbek economy — the currency,” one reporter specializing in automotive journalism told EurasiaNet.org.

Regardless of the unfolding scandal, little has changed on the car market. As before, it is still not possible to buy a car on the spot in Uzbekistan. Instead, hopeful car buyers have to pay down an 85 percent deposit and then sign up to a list that can lead to months of waiting.