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Uzbekistan: About-Face After Seizure of Russian Cellphone Firm?

Joanna Lillis Nov 8, 2012

In the latest twist in the long-running saga of Russian cellphone operator MTS in Uzbekistan, a Tashkent appeals court reportedly has made a landmark ruling and promised to return the company to its Russian owners. Tashkent had shut down the billion-dollar firm this summer. 
Russia’s RIA Novosti news agency quoted a “source close to the company” as saying that MTS had been told verbally that the appeals court had overturned a September ruling granting Tashkent the property of O’zdunrobita, MTS’ Uzbekistan arm, following a months-long dispute over alleged legal violations and tax evasion charges that the company vehemently denied. 
Vedomosti newspaper quoted another source “close to one of the sides in the proceedings” as confirming the news, but said that the court had ruled that the company should pay Tashkent “the monetary equivalent of the cost of its assets -- around $600 million.” The report said MTS had declined to comment. 
If confirmed, the ruling would signal an abrupt about-face by Tashkent that could suggest it has bowed to pressure from Moscow, which -- although not too vocal in its criticism -- has made it clear that it does look kindly on the treatment meted out to one of its oligarchs, Vladimir Yevtushenkov, owner of MTS.
The news that MTS might not forfeit its business (at a loss of over $1 billion) after all comes amid troubled times for Gulnara Karimova, eldest daughter of President Islam Karimov, who has been linked to two corruption cases in Europe. 
The first is a money-laundering investigation in Switzerland involving Uzbek nationals who (according to leaked documents) are her associates. One of them is O’zdunrobita’s former director, Bekhzod Akhmedov, who is listed by Interpol as wanted on money-laundering charges.
The other is a Swedish probe into allegations of suspicious payments by Swedish-Finnish telecoms giant TeliaSonera (which denies any wrongdoing) to businesswoman Gayane Avakyan, another Karimova associate involved in the money-laundering probe. 
On top of all that came news last week that Karimova has been running into trouble in Moscow, too, where her luxury apartment had, according to a “source,” been seized as part of an antitrust case launched by none other than MTS.
That report was never confirmed, but it certainly sent a clear signal that Karimova was not untouchable in Moscow. Now, with the heat on in Europe, she may need all the friends she can get.
Watch this space for further developments. RIA Novosti said a court in Uzbekistan would be hearing another appeal from MTS, this time over the loss of its license, on November 13.

Joanna Lillis is a journalist based in Almaty and author of Dark Shadows: Inside the Secret World of Kazakhstan.

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