Gulnara Karimova, the daughter of Uzbekistan’s strongman leader Islam Karimov, has been making international headlines for years amid charges of massive bribery and corruption. But fresh evidence unearthed by an anti-corruption watchdog suggests her avarice reached mind-boggling scales as she vacuumed up cash from telecoms companies wanting a slice of Uzbekistan’s lucrative cellphone pie.
Karimova received over $1 billion in payments and shares from Scandinavian and Russian telecoms companies such as TeliaSonera, Telenor, MTS, and Alfa Telecom, the Organized Crime and Corruption Reporting Project (OCCRP) alleged in a report published March 21.
“Her audacious schemes may have cost the people of Uzbekistan money that could have paid for pensions or healthcare but instead went into banks, an offshore hedge fund and luxurious real estate around the world, including a castle in France and a penthouse in Hong Kong,” the OCCRP stated.
The watchdog was skeptical of the defense put forward by telecoms firms that they did not knowingly commit any wrongdoing: “While the international companies involved claim to have been innocent or unwilling dupes of her maneuvers, the blatant means by which Karimova allegedly operated made it virtually impossible for those involved not to realize they were giving in to extortion and bribery.”
According to the documents the OCCRP obtained, Nordic telecoms giant TeliaSonera paid Karimova $381 million and promised another $75 million to enter Uzbekistan’s cellphone market. Russian company MTS paid $350 million, and Russia’s Alfa Telecom and its VimpelCom joint venture with Norway’s Telenor coughed up $176 million.
The data was compiled using an external review of TeliaSonera conducted by law firm Mannheimer Swartling; a Dutch Request for Legal Assistance; data from the US Securities and Exchange Commission; and “other financial documents obtained by OCCRP.”
The watchdog found that Karimova used techniques including demanding a percentage of a company “as a gift or dressed up as a fake investment in a local partner” and extorting cash for her “personal services and lobbying efforts.”
She “demonstrated a ruthless ability to acquire a share of ownership (her preferred rate was 26 percent) of lucrative telecom-related companies – without actually putting up any money for doing so,” the report said.
Allegations of massive corruption involving Karimova and the telecoms sector surfaced in 2012, when TeliaSonera was accused of shelling out $330 million in suspicious payments for the rights to operate in Uzbekistan. That sparked a corruption probe in Sweden, which is linked to a money-laundering investigation in Switzerland in which Karimova is a formal suspect.
TeliaSonera, also under investigation in the United States and the Netherlands, denies allegations of bribery and money-laundering, but has acknowledged that “the processes for conducting some transactions have not been in line with sound business practices.”
The Russian companies also deny any wrongdoing, and Norway’s Telenor, which is being probed in Switzerland, the Netherlands and the United States over allegations it made “unlawful payments” of $55 million in Uzbekistan, also denies bribery and says it has “zero tolerance for corruption.”
Karimova is also under investigation at home in Uzbekistan on charges of corruption, although there has been no public statement on her case since it was announced in September. She has been under house arrest since February 2014.