Pressure is mounting in Europe over graft probes linked to associates of Gulnara Karimova, daughter of Uzbekistan President Islam Karimov, as reports emerge that French and Latvian investigators are closing in on corruption enquiries previously confined to Sweden and Switzerland.
French investigators have opened a probe “targeting Gulnara Karimova” and linked to a money-laundering case connected to her associates, the Rue89 news website reported on July 31, citing an unidentified judicial source.
Swiss prosecutors confirmed earlier this month that French police had raided properties in France at the behest of the Swiss inquiry, which is investigating four Uzbek associates of Karimova’s for money laundering. One of the properties was a Paris flat belonging to Karimova, BBC Russian reported at the time, citing an “informed source.”
Rue89 said properties “which could belong to Gulnara Karimova” had been searched on June 18, adding that she owns “several bolt-holes in France” including a villa outside Saint-Tropez and a property in Paris’s chic 16th arrondissement. Rue89 said Karimova owned the real estate through Paris-based companies managed by Alisher Ergashev, a suspect in the Swiss dirty money probe.
Fugitive oligarch Mukhtar Ablyazov, who has been on the run from police in Kazakhstan and Britain, has been captured in the south of France, according to a report in the Financial Times.
Ablyazov was arrested on July 31 by French special forces near the billionaires’ playground of Cannes, the FT quoted an unnamed family lawyer as saying. It did not specify on what charges Ablyazov had been detained: Kazakhstan has been pursuing him for alleged financial crimes that Ablyazov denies, and he also has a case to answer in Britain, where he escaped a jail sentence for contempt of court last year by going underground.
Ablyazov formerly chaired Kazakhstan’s BTA Bank, which he also owned through an undeclared holding until it was forcibly nationalized in 2009. Ablyazov fled to London, where he was sued by his former bank for allegedly defrauding it of some $6 billion.
After years of legal wrangling, Ablyazov – who accuses Astana of pursuing him for political reasons and has asylum in the United Kingdom – fled to an unknown destination when the London High Court ordered him jailed for “deliberate and brazen” deception (concealing assets he had been ordered to disclose in the fraud case). Ablyazov was later debarred from fighting the case and the courts ordered his assets sold to compensate BTA Bank.
Less than a week after news broke that Gulnara Karimova, the image-conscious daughter of Uzbekistan’s long-serving strongman, had lost her post as ambassador to the United Nations in Geneva, she was home courting fans and drubbing a potential rival.
In a blog entry posted July 20, Karimova described her recent trip to the distressed market town of Kokand in the Fergana Valley. As she’s done previously to win sympathy with potential supporters, there Karimova championed small businesses. But she went further, using the opportunity to attack Rustam Azimov, the first deputy prime minister and finance minister – a man often mooted as a potential successor to her father, President Islam Karimov.
“Looking at the ads and signboards, you understand that you’re in a trading city, although the old posters and billboards that have been hanging there for ten years are a telltale sign that trade was more boisterous before the super financial regulator at the ministries of economy and finance introduced excise and other operational super limitations,” Karimova wrote in a clear reference to Azimov.
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.