Nordic telecoms giant TeliaSonera is pulling out of the Eurasian region in the wake of a three year-long scandal over its business dealings in Uzbekistan that saw it accused of funneling illicit payments to associates of Gulnara Karimova, the disgraced daughter of President Islam Karimov.
The company will gradually wind down its operations in its Eurasia section, which includes the six former Soviet states of Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan, as well as Nepal, and ultimately cease them altogether, it said in a statement on September 17.
The Swedish-Finnish company said it would focus instead on its telecoms business in Europe “within the strategy of creating the new TeliaSonera.”
“It is our belief that it is possible to do business in Eurasia which are [sic] both profitable and sustainable — but it is important to enter markets in a correct way,” it said.
When TeliaSonera entered Uzbekistan’s lucrative telecoms market, it allegedly used Karimova — at the time a major business player with telecommunications interests, but now under house arrest in Tashkent on corruption charges — as an intermediary.
TeliaSonera’s problems began three years ago, when a Swedish television station aired a report claiming the telecoms giant had made dubious payments to a shell company run by Karimova associate Gayane Avakyan in order to gain access to Uzbekistan’s market. That report sparked a major corruption investigation in Sweden that is ongoing to this day. The resignation of former chief executive Lars Nyberg and the dismissal of several senior company executives ensued the following year.
TeliaSonera — which is also under investigation in the United States and the Netherlands — has always denied accusations of bribery and says it has “zero tolerance” toward corruption, but has acknowledged that due process was not always followed in Uzbekistan.
Avakyan is at the center of several other corruption probes focussing on Uzbekistan’s telecoms sector, including a money-laundering investigation in Switzerland in which Karimova has been named as a suspect.
Another U.S. Department of Justice investigation has led to a New York court ordering the seizure of $300 million in allegedly illicit proceeds from an “international conspiracy.” Court documents alluded to an unnamed relative of Uzbekistan’s president that appeared to match Karimova’s description.
The litigation alleges that illicit payments were made by two other telecoms companies, Russia’s MTS and Amsterdam-based VimpelCom, to curry influence and secure favorable decisions to operate in Uzbekistan’s telecommunications sector.
Avakyan was convicted on corruption-related charges in Uzbekistan last year and is believed to be in jail. Karimova has been named by Tashkent prosecutors as a suspect in a multi-million-dollar mafia-style corruption case, and is incommunicado and reportedly being held under house arrest in Tashkent.