Anti-corruption investigators have reportedly detained recently dismissed National Economy Minister Kuandyk Bishimbayev on suspicion of taking bribes.
Tengri news website on January 10 cited the Agency for Civil Service Affairs and Anti-Corruption as saying Bishimbayev has been taken into custody and is being held at an Interior Ministry pre-trial facility in Astana pending investigations.
Bishimbayev was fired by presidential decree on December 28 and replaced by Timur Suleimenov.
President Nursultan Nazarbayev later hinted during a government meeting on December 30 that personnel changes at the National Economy Ministry stemmed from ongoing investigations into Bishimbayev and his dealings with the state-owned Baiterek holding company.
Dark clouds have for a while been gathering over Baiterek, or more specifically its daughter company Baiterek Development, which has been under investigation since mid-November.
On November 21, a number of executives at the company were arrested on suspicion of taking bribes from lobbyists for companies seeking contracts as part of the state’s ambitious Nurly Zhol infrastructure development program. According to the Kazakhstan edition of Forbes magazine, the amount of bribes taken amounted to 288 million tenge, around $900,000.
Just a few days after the former head of the tax service in Kazakhstan was appointed to serve as deputy to the chief of the security services, another senior tax official has been handed a top job in the defense ministry.
The presidential administration announced on December 1 that Abylkair Skakov would be moving from his post as head of the tax inspectorate in the capital, Astana, to become deputy defense minister.
Both appointments appear to stem from the government’s ongoing efforts to reduce graft and optimize financial efficiency, both key priorities as the economy faces the prospect of indefinite stagnation amid depressed prices for oil.
When Daulet Yergozhin was named as the new deputy head of National Security Committee, or KNB, even his colleagues were candid about the sense of the move.
“Daulet Yergozhin has shown himself to be an effective manager everywhere he has worked. He is a very upstanding person. I hope that [he] will also be effective in the fight against corruption, which is the main threat to our national security,” former deputy tourism and sports minister Bahytzhan Shengelbayev said on his Facebook account.
It is customary for top officials in the former Soviet space to speak notionally about corruption posing a security threat, but this is as concerted an effort to address the issue as the region has seen for a long time.
The twin KNB and Defense Ministry reshuffles look like a pincer movement on the armed forces. The KNB has not been heavily invested in investigating financial crime in recent years, and has focused more on antiterrorism or, in some cases, going after prominent figures in the opposition.
Uzbekistan’s state-run Channel One aired a sensational segment during a show called Business Club on November 5 that featured the frustrated observations of an indignant entrepreneur.
In a unusual televised outburst, Olim Sulaimanov explained how employees with a branch of the anti-finance crime department of the Prosecutor General’s Office in Tashkent had tried to extort money from him. Sulaimanov named names and figures in his description of how tax officials have been targeting his company.
“An employee with the department, Dilshod Hazratkulov, intimidates businessmen with money on their [bank] account and extorts money from them,” Sulaimanov said.
In Sulaimanov’s telling, Hazratkulov dropped in on his office in April and demanded that he transfer 48 million sum (around $7,500 at the current black market rate) onto the account of some other unknown company. The businessman said that when he refused, he had his assets frozen. Sulaimanov said that as a result he lost a $1 million contract to deliver fruit and vegetables to Russia.
The appearance on Business Club came about after Sulaimanov posted a video on YouTube directly appealing to acting president Shavkat Mirziyoyev for assistance. In the video, Sulaimanov asks that he be allowed to make his case during a television broadcast.
Sulaimanov, 61, founded and runs a company called Atlant Business Optima, which has been in operation since 2011 and deals primarily in exporting fruit and vegetables.
Now, whether this sequence of events is for real or otherwise is up for debate -- it is always possible it was a bit of theater for the viewers -- but what is clear is that Mirziyoyev is endeavoring to demonstrate that the rules of the game have changed for Uzbekistan’s long-suffering business community.
About 1,000 members of Uzbekistan’s business community assembled late last week at a Tashkent conference hall to parley with the Interior Ministry, tax officials and the General Prosecutor’s Office about how to protect themselves from the threat of corruption.
News of the event, which took place on October 27, was broadcast on the state evening news and several internet sites and newspapers.
The spur for dialogue came in the form of a decree signed by acting President Shavkat Mirziyoyev earlier in the month intended to ensure “the rapid development of business, protection of private property and the qualitative improvement of the business climate.” Improving life for private enterprise appears to be one of the many promises of reset being dangled before Uzbeks since the death of the late President Islam Karimov.
While television and state newspaper reports about the conference were skimpy on the details, online outlets delved a little further. For example, Gazeta.uz cited the chairman of the State Tax Committee, Botir Parpiyev, as admitting to the proliferation of unauthorized inspections on companies and that these were harming the prospects of business development in the country. A starling admission by anybody’s standards.
“According to [State Tax Committee] data, an average of about 4,000 unscheduled inspections were carried out in Uzbekistan [NB: no timeframe provided],” Gazeta.uz reported, citing Parpiyev. “More than 1,500 case files were sent for investigation.”
Parpiyev carried on to say that 200 companies are closing yearly as a result of these unannounced inspections, causing damages worth several million dollars in total.
“This has created major inconveniences and halted the operations of companies and the delay of salary payment to employees,” Parpiyev said.
The son of Tajikistan’s leader, a 29-year old sometimes touted as a possible successor to the presidency, has announced he has completed a sociological survey on corruption.
As head of the state anticorruption agency, Rustam Emomali was ideally positioned to undertake the task, although the news is likely to have provoked raised eyebrows all the same.
As it happens, many in Tajikistan firmly believe it is the ruling family and their associates that are largely to blame for the rampant bribery, although no comprehensive and independent polling has been done to measure those moods. Tajikistan ranked joint 136th out 165 countries in Transparency International’s latest Corruption Perceptions Index — the same as Nigeria and 17 position below Russia.
Emomali spoke about the research while providing an update on October 27 to his father, President Emomali Rahmon, on his agency’s effort to combat graft over the past year. The aim of the study was to understand the exact causes of corruption and determine public attitudes toward the problem by putting questions to around 88,000 residents, Emomali said.
Ozodagon website cited Emomali as saying that respondents queried stated they most often confronted corruption in the healthcare and education sectors and while securing services at the birth and marriages registry office.
More than half the people that participated in the survey said some of the most corrupt state organizations in Tajikistan also include the prosecutor’s office, the customs service, national security bodies, the judiciary, and the Interior Ministry.
Authorities in Uzbekistan have arrested the acting general director of part US-owned carmaker GM Uzbekistan on suspicion of embezzlement, RFE/RL’s Uzbek service has reported.
Ozodlik cited an unnamed source on June 23 as saying that Rustam Rajabov is suspected of appropriating large amounts of money through “an illegal scheme during the export of cars to Russia.”
The company’s previous general director, Tohirjon Jalilov, was detained in late April over what was rumored at the time to be suspicions of a scheme to resell Ravon models intended for export on the local market. Since the vehicles sell for higher prices in Uzbekistan than in Russia, where the GM Uzbekistan exports much of its goods, it is believed the management were pocketing the difference.
Rajabov was appointed acting general director on May 10.
A Tashkent-based reporter familiar with the details of the case told EurasiaNet.org that investigators say they traced 10,900 vehicles intended for export being stored in the city of Shymkent, just across the border in Kazakhstan. The thinking is that the cars were to be brought back into Uzbekistan.
“The preliminary assessment of damages in $285 million,” the reporter told EurasiaNet.org.
GM Uzbekistan’s Ravon Gentra model retails for $6,500 in Russia and Kazakhstan, but costs $12,500 to buy in Uzbekistan, where demand is high and waiting lists to buy cars long. Another popular model, the Ravon Cobalt, costs $6,000 abroad and $12,000 on the domestic market.
GM Uzbekistan, a company with a 25,000-strong staff and an annual turnover estimated at around $4 billion, consists of a joint venture between Uzbekistan's UzAvtosanoat (75 percent) and US giant General Motors (25 percent).
The value of Uzbekistan’s national currency spiked sharply over the weekend in a development that some have linked to the unfolding corruption scandal involving GM Uzbekistan.
Traders on the black market in the capital, Tashkent, were buying dollars for around 5,500 sum on May 15, up from around 6,400 sum in the days before. They were selling dollars for around 6,000 sum. Rates in the capital typically set the pattern for the rest of the country.
The sudden change in fortunes of the sum has come as something of a shock to small and medium-scale businesses.
Umid, a market trader who rents a small stall from which he sells ice-cream, drinks and fast food snacks, said that he pays $400 in rent every month.
“For me it’s good when the exchange rate is low, since I have to spend much less on buying dollars. The question I have is: How long is this going to last?” Umid told EurasiaNet.org.
Firuze sells clothes imported from Turkey at her stall at the Ippodrom wares market. With the dollar rate dropping, Firuze said she had decided to close up shop for a while.
“The drop in the exchange rate is profitable to those that earn their money in sum, but those who make their money in dollars don’t see any benefit,” she said.
The speculation in Tashkent markets is that the sudden change in the fortunes of the national currency is somehow related to an ongoing corruption scandal involving senior management at carmaker GM Uzbekistan — a joint venture between Uzbekistan’s UzAvtosanoat (75 percent) and US giant General Motors (25 percent).
Prior to the scandal, GM sold some of its cars in dollars, which drove up local demand for the US currency. Now, however, payment is made in sum, which has led naturally to a fall in the desirability of the dollar.
In an unprecedented move, Mihran Poghosian, a senior Armenian official named in the Panama Papers’ corruption exposé, resigned from office on April 18. His stated reason, though, was not the accusations against him, but, apparently, a more patriotic one – the dishonor of sharing press space alongside Azerbaijani President Ilham Aliyev.
In an explanation sent to Armenian media outlets, Poghosian described himself as “saddened that my name is being raised alongside the family of Azerbaijani President Ilham Aliev, who has actually privatized millions of dollars,” according to an English-language translation of his comments published by RFE/RL’s Armenian service. “I find it unacceptable that I might be the reason for any possible civilized parallel to be drawn between my country and dictatorial Azerbaijan.”
“Is this a sign that something is changing in this country?” asked Yerevan resident Naira Soghomonian, 31. “Or is this another way of distracting people from the truth? Anyway, who would have thought . . .?”
Civil activist Syuzan Simonian, founder of the Front of Armenian Women, suspects the resignation is intended to quiet potential frustration with the government.
Gold mines for Azerbaijan’s presidential offspring, an ex-Georgian leader’s offshore company, a key Armenian official’s questionable income, the grounds for a clamoring public outcry in the South Caucasus over the Panama Papers were all there. But, so far, it hasn’t come.
Details about the Azerbaijani presidential family’s alleged control over Azerbaijan’s goldmines and its supposed business alliance with Tax Minister Fazil Mammadov hit on April 4, a day before a ceasefire which more or less ended three days of fighting with Armenian and separatist Karabakhi forces.
A 2012 report by RFE/RL, an OCCRP partner, had found that Aliyev’s daughters had stake in the goldmines; a revelation that OCCRP believes cost RFE/RL investigative journalist Khadija Ismyailova her freedom.*
Six more arrests have been made in a high-profile corruption case involving prominent media figures that has sparked fresh claims that freedom of speech is under attack in Kazakhstan.
Aset Matayev, director of the KazTAG news agency, four government officials and ex-officials and a senior official from the state Kazakhtelecom company are suspected of involvement in a conspiracy designed to defraud the state of more than $1 million dollars, the National Bureau for Counteracting Corruption said in a statement on March 28.
Aset Matayev is the son of Seytkazy Matayev, a well-respected figure on Kazakhstan’s media scene whose arrest in February on charges of embezzlement and tax evasion sparked a domestic and international outcry.
Now, Aset Matayev has, like his father, been placed under house arrest after the investigation purportedly revealed that he had “taken a direct part in the embezzlement of budget funds,” the anti-corruption bureau said.
Four current and former officials from the government’s Communications, IT and Information Committee have also been arrested: director Talgat Kazangap and former director Bolat Kalyanbekov are on bail; and Bolat Beserbayev, another ex-director, and his former deputy Bek Arpabayev are under house arrest. Also under house arrest is Batyr Makhanbetazhiyev, who is strategic management director at Kazakhtelecom.
The Matayevs categorically deny the charges against them. Aset Matayev told EurasiaNet.org in February that he believes the case is politically motivated and designed to get hold of valuable real estate owned by his father.