VimpelCom has become the third major operator facing legal issues over its activities in Uzbekistan, following TeliaSonera and MTS. VimpelCom confirmed today that it is under investigation by the US Securities and Exchange Commission and Dutch…
VimpelCom has become the third major operator facing legal issues over its activities in Uzbekistan, following TeliaSonera and MTS.
VimpelCom confirmed today that it is under investigation by the US Securities and Exchange Commission and Dutch authorities over its operations in Uzbekistan.
VimpelCom, in which Russia’s Alfa Group and Norway’s Telenor are the largest shareholders, said the US SEC informed it yesterday that it is conducting an investigation related to the company and requested documents.
Also yesterday, representatives of Dutch authorities, including the public prosecutor office, visited the company’s Amsterdam headquarters, notified it that it was the focus of a criminal investigation in the Netherlands and obtained documents.
“The investigations appear to be concerned with the company’s operations in Uzbekistan,” VimpelCom said, adding that it intends to cooperate fully.
A spokesperson for the company highlighted that it is not facing any charges at this point, but declined to comment on the investigation. VimpelCom has retained professional advisers for the situation he confirmed, without naming them.
Last year, Uzbek tax authorities reportedly launched an investigation into VimpelCom’s local unit Unitel. The unit appointed a new CEO, Alexander Vorobyov, this January.
Meanwhile, the Swiss federal prosecutor is investigating Gulnara Karimova, daughter of the Uzbek president, in relation to money laundering accusations which may stem from earlier illegal activity in the Uzbek telecoms market. This Swiss federal prosecutor’s involvement centres around financial assets in Switzerland related to the accusations and, so far, assets worth more than CHF800m (US$913.6m) have been confiscated, Swiss authorities announced today.
VimpelCom is not the first international telco to face legal issues in connection with operations in Uzbekistan. Russian rival MTS was embroiled in a long dispute with Uzbek authorities over a criminal case against staff at its local unit Uzdunrobita (MTS Uzbekistan). The unit had it licence revoked and was forced to file for bankruptcy in January 2013 after local courts ordered it to pay about US$600m in fines.
In December, Uzbek authorities transferred Uzdunrobita’s assets to state-owned Uzbektelecom for what an MTS spokesperson described at the time as “safekeeping”.
Meanwhile, Sweden’s TeliaSonera has been investigated by Swedish prosecutors over its Uzbek operations, specifically concerning how a 3G licence was obtained in 2007. This prompted major management changes, including the departures of the CEO and CFO. At the company’s request, Norton Rose Fulbright is reviewing partners and the deals that it has made across Eurasia in the past few years.
