Tajikistan: Firing of Official Reignites Talco Intrigue

When top officials are fired in Tajikistan, it is usually with reassuring formulations about the person in question being moved to another job or retiring. The absence of such language typically suggests a fall from grace that in some instances serves as a prelude to a criminal prosecution.

So eyebrows were raised this week when President Emomali Rahmon on February 21 abruptly ordered the dismissal of US-educated deputy finance minister Umed Latifov without indicating what his fate is to be. The development had been linked with the much whispered-about elite infighting believed to be taking place over the country’s largest industrial asset — Talco aluminum manufacturer.

Latifov had not been in the job for long and was appointed only in July 2016. Before that, he was deputy head of the National Bank, a post he filled in May 2015.

His presumably lucrative background of working in US investment vehicles made his decision to return to his home country something of a surprise at the time. According to his LinkedIn profile, he completed a finance degree at Arizona State University and later obtained an MBA from Stanford University. He later dabbled in online startups and worked in various capacities at several investment firms.

By all accounts, Latifov’s return to Tajikistan was enabled by the deputy National Bank deputy chairman Jamoliddin Nuraliyev, who is also the son-in-law of President Rahmon. Nuraliyev, who is also US-educated courtesy of multiple qualifications from the University of Maryland, was appointed to his post in May 2015 in the wake of a massive devaluation of the national currency, the somoni, which prompted the government to dismiss the entire leadership of the National Bank. 

This reliance on US-educated specialists to stabilize the somoni does not appear to have done the trick, which might in part explain Latifov’s apparent downfall.

But watchers of Tajikistan’s economic scene have speculated that Latifov may have been instrumental in the drafting of a coruscating Finance Ministry report published in October that alleged that Talco had on paper lost around $1.1 billion from 2010 to 2016 through the way in which it pays for its raw inputs. Large amounts of money are paid for those materials to a Talco-affiliated company registered in the British Virgin Islands in a standard application of transfer pricing, an ostensibly legal if weaselly practice favored by some commodity concerns to maximize profits while avoiding scrutiny.

The Finance Ministry report dwelled on that and more, accusing Talco of evading taxes, laundering money and reneging on its liabilities to the government, to which its owes vast amounts in unpaid electricity bills.

To complicate matters, there is also a dynastic element to all this drama.
Talco is controlled by Hasan Asadullozoda, brother-in-law of President Emomali Rahmon. Asadullozoda’s other commercial interests include Oriyonbank and Somoni Air.

For that reason first and foremost, the Finance Ministry report proved a bombshell. But then, in another surprising turn of events, another deputy finance minister, Jamshed Karimzoda, announced at a news conference on January 27 that the report had only been leaked into the public domain as the result of a “casual misunderstanding.”

Karimzoda claimed that the report was nothing by a experience-gathering presentation by some low-ranking ministry employees.

“Every Wednesday, regular lowest-level employees of the ministry hold discussions on a variety of simple topics. After the discussion, they prepare presentations and then post them on the site,” Karimzoda said.

The report has since been deleted from the Finance Ministry website, but a copy seen by EurasiaNet.org shows that while the document is brief, it appears more assured than the amateurish presentation described by Karimzoda. A distinct possibility whispered about in Tajikistan, where public discussion of the ruling family’s commercial interests is strictly taboo, is that Latipov has been identified as a chief mind behind the report and is now paying the price.

Tajikistan: Firing of Official Reignites Talco Intrigue

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