Update, July 18: A trusty source close to Washington tells EurasiaNet.org that Economics Minister Temir Sariev's allegations are "way off" and characterized him as a "populist" with an unclear agenda. But someone is going to be very unpopular when that money doesn't come home. Stay tuned.
The son of Kyrgyzstan’s deposed dictator might be living a cushy life in the United Kingdom, but money he stashed in the United States is reportedly now sitting behind bars.
Russia’s Kommersant daily, citing Kyrgyzstan’s Economics Minister, reported on July 17 that Washington has frozen three of Maxim Bakiyev’s American bank accounts, which held $74.4 million.
Bakiyev is the son of former President Kurmanbek Bakiyev, who was ousted amid street violence in April 2010. The younger Bakiyev, who fled to the UK, was known in Kyrgyzstan as the “prince” for parlaying his father’s influence into lucrative and opaque business deals. To this day, in Kyrgyzstan he might be more reviled than his father. In March, a Bishkek court found the younger Bakiyev guilty in absentia of embezzling over $100 million in state funds. He received a 25-year prison sentence.
Late last year, the Department of Justice tried to extradite the younger Bakiyev from London to the United States to face charges of conspiracy to commit securities fraud and obstruction of justice. An affidavit, filed last April in the US District Court for the Eastern District of New York, appeared to finger Maxim as “co-conspirator #1” in an insider trading case involving US securities. (The affidavit did not name Maxim Bakiyev.)
Astana and fugitive oligarch Mukhtar Ablyazov are engaged in an escalating war of words after Italy expressed contrition for deporting his wife and daughter to Kazakhstan.
Italy revoked the deportation order on July 12, citing failings in the procedure that saw Alma Shalabayeva and six-year-old Alua Ablyazova arrested in an overnight raid near Rome on May 28-29 and whisked to Kazakhstan on a private jet. Shalabayeva is now under criminal investigation in Almaty for allegedly using forged documents.
“It was a grave failure not to inform the government of the entire episode, which had from the start elements and characteristics that were not ordinary,” Reuters quoted a statement from Italian Prime Minister Enrico Letta’s office as saying.
The speed of the deportation was questioned at the time, with Shalabayeva’s Italian lawyer Riccardo Olivo describing it as “incredible” and accusing Rome of having “handed her over as a hostage to a dictator.”
Ablyazov says he believes his wife and daughter are in “grave danger” in Kazakhstan. In a letter to Letta quoted by La Stampa, he hailed the “courageous decision” to revoke the deportation order but said he feared Astana planned to send his wife to jail and his daughter to an orphanage.
The powerful, jet-setting daughter of Uzbekistan’s president is no longer her country’s ambassador to the United Nations in Geneva. The accompanying loss of diplomatic immunity for Gulnara Karimova, who is embroiled in criminal investigations in Europe, could pave the way for her summons by prosecutors investigating hundreds of millions of dollars in telecoms-related corruptions charges that have her fingerprints all over them.
The Uzbek Foreign Ministry informed the Swiss Embassy in Tashkent last week that Karimova was no longer the country's permanent representative to the UN, the BBC’s Uzbek Service reported on July 13. Switzerland's RTS public service broadcaster said her exit had resulted in Karimova's loss of diplomatic immunity. The reports did not clarify if she quit or was asked to leave, but RTS added that French authorities had searched Karimova's French properties last month at the request of Swiss prosecutors.
Taking to Twitter, Karimova played down the loss of diplomatic immunity and blamed "other parties" for pressuring Swiss authorities, including Russian telecoms giant MTS, which had its Uzbek business expropriated last year: "[I]t's not true, but to know who and why spreading that [information on the loss of immunity] you can ask Swiss authorities and also other parties clearly involved in this PR 'action' from beginning like [R]ussian MTS!"
The results for Azerbaijan proved the big surprise from the South Caucasus in this year's Global Corruption Barometer by anti-corruption watchdog Transparency International.*
Though Azerbaijan is repeatedly rated and berated as the region’s most corrupt country, many of the 1,001 Azerbaijanis surveyed for the poll by the Baku-based SIAR (Social and Marketing Research Company) had a more positive assessment of their national corruption situation than did respondents for neighboring Armenia and Georgia.
Azerbaijan long has had run-ins with allegations that senior officials and members of President Ilham Aliyev's family are cashing in on their positions, but, apparently, most respondents believe the government now is giving the corruption fight all it's got. Sixty-eight percent of respondents deemed the government's actions "effective," a rate which topped Georgia, often described as the region's main corruption-buster, by 14-percentage points.
On perceptions of corruption in the public sector, Azerbaijan finished a half point behind Georgia, roughly mid-range on a scale of one to five, while Armenia settled firmly into the trouble zone at 4.4.
Similarly, both in Azerbaijan and Georgia, public perception of corruption of political parties was 28 percent of respondents, according to Transparency International (TI). The rate is noticeably higher in Armenia, at 57 percent.
Another foreign telecoms firm appears to have been paying millions of dollars to various charities in Uzbekistan, some of them linked to Gulnara Karimova, strongman Islam Karimov’s flamboyant daughter. The revelations come in the wake of reports that Nordic telecoms giant TeliaSonera paid Karimova’s charities to stop harassment from Uzbek officials.
Following the launch of a corruption probe in the UK involving a natural resources giant with strong links to Kazakhstan, the company, ENRC, has become the subject of a hostile takeover bid by powerful interests with connections to the Central Asian state.
The three oligarchs who founded the London-listed Eurasian Natural Resources Corporation – Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov (who are all believed to have powerful connections in Kazakhstan) – have teamed up with the Kazakh government to mount the takeover. Together the four parties hold a combined 55.33 percent of ENRC, with the three founders owning equal shares of 14.56 percent each and Astana owning 11.65 percent.
ENRC’s committee of independent directors has rejected the bid on the grounds that it “materially undervalues ENRC,” according to a May 17 statement.
The committee said that the City of London’s Panel on Takeovers and Mergers, which regulates takeover bids for London Stock Exchange-listed firms, had granted its request for an extension until June 3 for a decision on the bid, to allow the consortium time to make a better offer – something there is no guarantee it will do.
The takeover panel issued a statement on May 20 saying that another London-listed company linked to Kazakhstan, the Kazakhmys copper miner, is officially to be treated as part of the takeover bid, because Astana plans to use its stake in Kazakhmys to finance the ENRC buyout.
The United Kingdom’s Serious Fraud Office (SFO) has launched a criminal investigation into alleged corruption at a London-listed natural resources giant with strong links to Kazakhstan, British media report.
The SFO probe targets the Eurasian Natural Resources Corporation (ENRC), a company with interests in the energy and mining sectors mainly in Kazakhstan but also in China, Brazil and some African states. It is partially owned by three oligarchs believed to have powerful connections in Kazakhstan. The Kazakh government also holds a stake.
“The focus of the investigation will be fraud, bribery and corruption relating to the activities of the company or its subsidiaries in Kazakhstan and Africa,” The Guardian newspaper quoted the SFO – an arm of the British government – as saying in an April 25 statement.
ENRC, which is listed on the London Stock Exchange, said in a statement the same day that it “is assisting and cooperating fully with the SFO” and “is committed to a full and transparent investigation of its procedures and conduct.”
The news follows a troubled period for ENRC, whose chairman Mehmet Dalman resigned on April 23, less than two weeks after a law firm appointed by ENRC to pursue an internal inquiry into the corruption allegations – first made by a whistleblower – was abruptly replaced.
It has long been rumored that huge bribes change hands in Kazakhstan to secure public-service jobs and law-enforcement positions that come with small salaries but enormous potential to make a few bucks on the side.
Now comes some indication of just how large the bribes may be: A human resources official in South Kazakhstan Region’s bureaucracy is under arrest after demanding a $50,000 backhander in a cash-for-job deal, Kazinform reports.
The official offered her services to secure a lowly job as deputy head of the regional Entrepreneurship and Trade Directorate, begging the question of how much money might be changing hands for more senior (and potentially lucrative) positions.
Graft is officially acknowledged to be rife throughout Kazakhstan’s bureaucracy, including the judiciary and law-enforcement system.
Last month the financial police said that some tax officials were taking bribes ranging from 1,000 to 1 million tenge (approximately $6.60 to $6,600) to fix results on tax audits, Tengri News reported.
In one high-profile case, Major-General Almaz Asenov, former head of the military’s armaments department, was arrested earlier this year on suspicion of taking a $200,000 kickback from two representatives of Ukrainian company Ukrspetzeksport in return for turning a blind eye to faulty repair work on An-72 aircraft.
Gulnara Karimova, daughter of Uzbek President Islam Karimov, has finally broken her long silence about allegations that she is connected to two corruption cases being investigated in Europe, complaining to Swiss magazine Bilan that her “enemies” are taking advantage of the situation to undermine her reputation and griping that the “attacks” are distracting her from her charitable work.
In the interview published March 7, Karimova launched a fierce attack on Russian telecommunications company MTS (which left Uzbekistan last year amid a furious dispute with Tashkent) and its former director, Bekhzod Akhmedov, once believed to be Karimova’s right-hand man.
Akhmedov is a central figure in two European corruption investigations: a money-laundering probe in Switzerland and a Swedish investigation into allegations that Nordic telecoms giant TeliaSonera made dubious payments to enter Uzbekistan’s telecoms market in 2007 – a probe which forced the resignation of CEO Lars Nyberg last month.
According to company correspondence filed with a Swedish court, TeliaSonera officials negotiating with Akhmedov (who was head of their rival MTS at the time) to enter the market believed he was “the telecom representative of Gulnara Karimova.”
Karimova has no official role in Uzbekistan’s telecoms sector; officially, she is Uzbekistan’s ambassador to the United Nations, and she is also a fashion designer and a pop diva under the stage name Googoosha.
Uzbekistan's customs declaration: All kinds of pitfalls for the unwary traveler.
Uzbekistan’s new currency restrictions have generated some bafflement inside the country, as EurasiaNet.org has already reported – but confusion over the Byzantine regulations regulating the sale and movement of dollars and other currencies, including the Uzbek som, is nothing new.
That bewilderment helps fuel a booming business at Uzbekistan’s main land border with Kazakhstan, where intermediaries are on hand to help the perplexed traveler navigate the obligatory customs forms – for a small consideration, naturally.
The intermediaries, all from Uzbekistan, accost travellers on both sides of the Chernyayevka border post near Tashkent and are also present in the Uzbek customs section, where officials presumably turn a blind eye in exchange for a share in the profits.
The form fillers offer assistance in navigating the Byzantine bureaucracy for a fee of 100 tenge (about 65 cents) or 2,000 sums ($1 at the official rate or around 80 cents at the black market rate).
On a recent Saturday afternoon they were doing a roaring trade. But why would anyone pay someone to fill in a form he could just complete himself, I asked one matronly Uzbek woman who approached me offering her services.
“Different reasons,” she said. “Some don’t have a pen, others have forgotten their glasses, a few can’t write.” She and her giggling colleagues were performing a “public service,” she joked with a flash of gold teeth.