Hot on the news that Gulnara Karimova, daughter of Uzbekistan’s strongman president Islam Karimov, is a formal suspect in a Swiss money-laundering investigation, embattled Nordic telecommunications giant TeliaSonera has become the target of a related corruption probe in the United States.
“TeliaSonera has been informed that the U.S. Department of Justice (DOJ) has an ongoing investigation regarding TeliaSonera’s transactions in Uzbekistan,” the company said in a March 17 statement. “The DOJ has sent a request for documents to TeliaSonera. In addition, TeliaSonera has received a request from the U.S. Securities and Exchange Commission (SEC) to submit documents and information related to Uzbekistan.”
The company made the announcement five days after revealing that two of its daughter companies, TeliaSonera UTA Holding B.V. and TeliaSonera Uzbek Telecom Holding B.V (the holders of TeliaSonera’s operations in Uzbekistan, where it operates the Ucell brand), are under investigation in The Netherlands in a bribery and money-laundering case.
“Dutch authorities have requested collateral for any financial claims which may be decided against TeliaSonera UTA Holding BV,” TeliaSonera said on March 17, adding that the request for collateral stands at 10-20 million euros.
Customs officials in Uzbekistan say they have stopped 20 luxury cars stolen in Europe from transiting to neighboring Tajikistan over the past year.
The vehicles, including BMWs and Range Rovers, are worth approximately $1.5 million, the State Customs Committee said in a January 4 statement. Tajik citizens had shipped the cars by rail from the Baltic states of Latvia and Lithuania with forged registration documents. According to the customs service, Interpol has confirmed the vehicles were stolen.
The announcement comes two weeks after German officials alleged that associates and relatives of Tajikistan’s president, Emomali Rakhmon, are driving some 200 luxury cars swiped from the streets of Germany. Investigators said they traced many of the vehicles with their built-in GPS location-tracking systems.
That purloined autos are plying Tajikistan’s roads has long been an open secret in Dushanbe, the capital. Western officials there often complain that their Tajik counterparts are unwilling to address the problem. Indeed, mounting frustration may have led officials in Berlin to leak the embarrassing accusations.
Tajik authorities deny the German accusations. A spokesman for Rakhmon called them “provocative and untrue.” The Foreign Ministry said any blame must rest with transit countries that allow the cars to pass.
A new report focusing on Azerbaijan’s energy sector is exposing flaws in an initiative designed to promote transparency in extractive industries.
The report, distributed December 10 by the watchdog group Global Witness, is titled Azerbaijan Anonymous. It shows that while Azerbaijan technically adheres to transparency standards established by the Extractive Industries Transparency Initiative (EITI) lots of money may still be disappearing into a black hole of corruption.
“Privately owned companies are making millions handling oil that belongs to the Azerbaijani people, yet the identity of their owners is hidden, and it is not clear why they are involved,” the report states.
“The lack of transparency highlights gaps in the EITI, as it shows that countries can comply with its rules, while large deals are being struck with very little transparency,” the report continued. “It is important for Europe that Azerbaijan keeps the oil and gas flowing and maintains transparent and well-run energy industry. Yet this briefing shows that much of the oil business in Azerbaijan remains opaque.”
An entire chapter of Azerbaijan Anonymous is devoted to the dealings of a mysterious entrepreneur, Anar Aliyev. Global Witness investigators determined that Aliyev has made at least 48 deals over the past eight years with the state oil company Socar, covering “all facets of the supply chain of the oil industry.” Even though there is a lengthy record, little is known about Aliyev’s background. “Despite Anar Aliyev’s apparent significance in Azerbaijani oil, publically available information on him is thin,” the Global Witness report stated.
There was a Cold War-era saying – attributed to various Western leaders, including Margaret Thatcher and Helmut Schmidt – that mocked Russia as being nothing more than “Upper Volta with missiles.” These days, when it comes to corruption, Russia can only wish it compared favorably to Upper Volta.
The recently released Corruption Perception Index for 2013, compiled by the watchdog group Transparency International, ranks Russia 127th out of 177 countries surveyed. Burkina Faso, the name that Upper Volta adopted back in 1984, ranked 83rd, one of the better results among West African states.
As for other formerly Soviet countries, the latest Transparency International index presented a depressingly familiar picture: most states in the Caucasus and Central Asia are cesspools of graft, some more malodorous than others.
Central Asia in general could be described as a rabbit hole of venality. Once again, Uzbekistan and Turkmenistan found themselves near the very bottom of the rankings, tied in 168th place with Syria. Tajikistan (154th) and Kyrgyzstan (150th) did not lag far behind. And Kazakhstan took a wrong turn compared with its 2012 ranking, registering 140th this year.
The Caucasus was comparatively cleaner, though still rather rank. Azerbaijan (tied with Russia in the 127th place) and Armenia (94th) both made slight progress this year over 2012’s results. Meanwhile, Georgia was the region’s shining star, making a strong year-on-year improvement to come in at 55.
Elsewhere, Ukraine ranked a disturbingly low 144th, and Moldova came in 102nd.
An obscure offshore oil and gas company is reportedly under investigation for stealing oil in Uzbekistan. The news will come as no surprise to the few brave Western investors still operating in the business-unfriendly Central Asian state, where a major redivision of spoils appears underway as President Islam Karimov’s once-powerful daughter comes under unprecedented attack.
Authorities have launched an investigation into an alleged theft of government-owned oil by Tethys Petroleum, Russia's RIA Novosti news agency reported on December 4, quoting an anonymous source. The firm, which denies wrongdoing, announced the launch of new oil and gas prospecting projects in the country only six months ago.
RIA Novosti said the company had been accused of stealing oil worth between $30 million and $40 million. Bakhrom Salakhitdinov, identified as the head of Tethys's operations in Uzbekistan, has been arrested, the news agency added.
Tethys calls the allegations “entirely without foundation.”
“We are in contact with the relevant authorities in order to reach an understanding of the reasons for the allegations and a satisfactory resolution of the situation as soon as possible. We are exploring all appropriate means to protect the company’s interests and ensure the safety of our employees in Uzbekistan. Oil production continues as normal,” the company told EurasiaNet.org via email.
Thousands of protesters rallied in the city of Osh in southern Kyrgyzstan on December 2 to call for the release of opposition politician Akhmatbek Keldibekov, who was arrested on corruption charges on November 20.
They gave the authorities three days to free Keldibekov, a parliamentarian for the nationalist Ata-Jurt party, whose leader Kamchybek Tashiyev was recently convicted on charges of seeking to overthrow the government.
The Vecherniy Bishkek newspaper quoted police as saying that around 3,000 protesters turned out in Osh, but by evening police said most had dispersed, leaving around 100 people on Osh’s main square.
The demonstrators were mostly peaceful but some tried unsuccessfully to storm the regional administration building, Kloop reported. They also threatened to take the government’s representative in the region, Sooronbay Jeenbekov, hostage (he was whisked away by police). Sporadically over the past 10 days, Keldibekov’s supporters have blocked the highway from Osh to the Chinese border at Irkeshtam, an important trade crossing.
Four executives have been dismissed from Nordic telecoms giant TeliaSonera amid an ongoing corruption investigation in Sweden that has come uncomfortably close to Gulnara Karimova, the scandal-hit daughter of Uzbek President Islam Karimov.
“The Board’s conclusion is that some senior employees no longer have the trust of the Board,” Marie Ehrling, its chairwoman, said in a statement posted on TeliaSonera’s website on November 29. “Therefore they have been notified that their employment with TeliaSonera will be terminated and they will leave their position effective immediately.”
The dismissals come amid repercussions from an ongoing corruption probe that Swedish police opened in September 2012 into claims that the Swedish-Finnish telecoms giant paid hundreds of millions of dollars in bribes to enter Uzbekistan’s telecoms market.
The probe forced the resignation of CEO Lars Nyberg in February, and now four more heads have rolled. The company did not name them all but said in a second statement on November 29 that Chief Financial Officer Per-Arne Blomquist would “leave his position effective immediately.” The Financial Times reported that Tero Kivisaari, the company’s former head of the Eurasia division, was another of the fired employees.
Tajikistan’s President Emomali Rakhmon has appointed his son to head the country’s Customs Service, the president’s website reported today. Many have long believed Rakhmon is grooming the 26-year-old Rustam Emomali to be his successor; today’s announcement will certainly cement those views.
Rakhmon held the first meeting of his new cabinet on November 30. The strongman, in his 21st year in power, dismissed the government earlier this month after winning a fourth term in a poll widely derided as farcical. Rakhmon regularly reshuffles senior leaders in a process that ensures few others gain significant power or build strong patronage networks.
For almost three years, the younger Emomali had been deputy head of the Customs Service in charge of combatting smuggling. He has also served on the capital’s city council, worked at the State Committee for Investments and State Property Management and as deputy head of the national football federation, according to Asia-Plus. He is also a founder and part owner of Dushanbe’s Istiqlol Football Club.
Scandal-plagued Nordic telecom giant TeliaSonera has distanced itself from its local subsidiary in Uzbekistan, Ucell, after Ucell sponsored an event hosted by Gulnara Karimova, the controversial daughter of the country’s strongman.
Ucell sponsored a concert this week marking the opening of Karimova’s annual weeklong arts, music, and fashion extravaganza, Style.uz.
That’s likely a little embarrassing for TeliaSonera, which is embroiled in a corruption investigation in Sweden, accused of paying over $300 million in bribes to a Karimova associate for access to Uzbekistan’s telecoms market.
A spokesperson for TeliaSonera confirmed that Ucell had sponsored the event but stressed the decision was taken locally without its involvement, Sweden’s The Local website said on October 24. "Ucell contributes to projects meant to contribute to Uzbek society," The Local quoted the TeliaSonera representative as telling the TT news agency. TeliaSonera did not disclose the amount of money Ucell had paid for Karimova's bash, which is billed as a charity fundraiser, The Local said.
In February, an audit unearthed no evidence of corruption, but found TeliaSonera had not employed adequate safeguards when entering as opaque an environment as Uzbekistan, which Transparency International ranks as 170 out of 174 on its Corruption Perceptions Index.
A nephew of Uzbekistan’s Islam Karimov, who was once tipped as a potential successor to the aging strongman, has been detained on suspicion of operating an organized crime ring.
Citing a source at the Fergana Region prosecutor's office, Uznews.net reported today that Akbarali Abdullayev, a son of the first lady's sister, was arrested October 10 on embezzlement, tax evasion and bribery charges.
"He is in a detention center in Tashkent at the moment. His arrest warrant has been sanctioned from on high," Uznews.net quoted the source as saying.
Abdullayev and his mother Tamara Sobirova, the president’s sister-in-law, are widely believed to control large swathes of the economy in Uzbekistan's Fergana Valley, including industrial giants like the Fergana oil refinery and a cement plant in Kyvasay.
In the summer of 2012, Abdullayev reportedly fled Uzbekistan following the arrests of several of his business associates on corruption charges. After Sobirova received guarantees her son was safe, Abdullayev returned in late 2012, Uznews.net said.
Prior to that drama, Abdullayev had been mooted, Uznews said, for a seat in parliament's upper chamber, the Senate (where the president has the right to appoint 16 of 100 members), and was sometimes tipped as a potential successor to Karimov.