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.
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.
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.
Fancy entering Uzbekistan’s telecom market? Russian mobile giant MTS's assets are up for auction and can be yours for about $300 million.
MTS, which was the largest mobile operator in Uzbekistan until last summer, withdrew from the country’s scandal-ridden telecom sector this year after it became embroiled in a shady taxation dispute that looked more like an official asset grab.
A "committee of creditors" of MTS's Uzbekistan subsidiary, O'zdunrobita, has decided to auction off the firm's assets, the Uzbek State Committee for Privatization, De-monopolization and Development of Competition announced through its Biznes-Daily Media website on June 3.
Officials set a reserve price at 600 billion sums (about $290 million at the official exchange rate), Biznes-Daily Media said. The deposit required to register for the auction is 20 percent of the reserve price ($58 million). Bidders may submit their applications by 6 p.m. Tashkent time on June 28. The auction will be held July 1.
In some ways, it's a deal. Last year, Michael Hecker, MTS's vice-president for strategy and corporate development, put the value of the company's Uzbekistan assets at over $1 billion.
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.
Another Russian mobile giant came under attack in Uzbekistan this week.
Uzmetronom, a website that frequently features leaks and opinions from well-placed sources, reports that Beeline subscribers in Uzbekistan have been experiencing "serious difficulties" with the company’s connection over the past couple of days.
That wouldn’t normally be strange, except that last summer another Russian telecoms firm was forcibly shutdown in what looked like a state-orchestrated corporate raid. At the time, authorities accused MTS’s local subsidiary, O’zdunrobita, of violating equipment-usage terms and of tax evasion. When the plug was pulled on July 17, some 9.5 million customers were forced to flee to other carriers.
Now this, from a website believed to have close ties to the Uzbek security services: "[Beeline] telephones are either showing the complete absence of a signal, even in areas where it has always been stable, or the connection is such that it is impossible to comprehend the words of the interlocutor," Uzmetronom reported on April 18.
Uzmetronom says Beeline’s "vaunted" 3G services have stopped working outside Tashkent altogether, while the company is keeping "total silence" about the problems and whatever actions it has taken to solve them. "Beeline seems to understand perfectly that after the liquidation of MTS the people of Uzbekistan practically have no choice.”
Soap opera writers in Uzbekistan need not look far for inspiration.
This spring, the state-run Uzbektelefilm studio is scheduled to release a series on the inner workings of a fictional local mobile phone company, Silkphone.
The private Podrobno.uz website reports that the 100-part series will be filmed at the Uzbekistan national broadcasting company, O'zbekiston. Director Andrey Afrin says he will employ over 100 actors and the first 20 episodes of “Steps of Life” will air in May and June.
As they turn Silkphone into Uzbekistan’s leading mobile provider, the soap’s main characters – young female manager Dilyafruz and her underlings – will tangle with "important topics such as love and betrayal, problems of morality and rethinking mistakes,” says Podrobno.
The topic may prompt some observers to snigger: Over the past year two large international telecoms firms working in Uzbekistan have been embroiled in scandals linked to the strongman president’s socialite daughter, Gulnara Karimova. Russian giant MTS was summarily closed and its assets seized last year when authorities accused the company of tax evasion. MTS was forced to write off over $1 billion in assets and said the state was trying to expropriate its business. An appeals court later ordered the assets returned, in exchange for fines and penalties to the tune of $600 million.
The head of Swedish-Finnish telecoms giant TeliaSonera, Lars Nyberg, has resigned after an auditor found the company was negligent when purchasing mobile licenses in graft-saturated Uzbekistan.
The 2007 deal was thrust into the spotlight in September, when Swedish journalists accused TeliaSonera of paying some 2.2 billion Kroner ($337 million) to a small, offshore company linked to President Islam Karimov’s daughter, Gulnara Karimova.
Mannheimer Swartling, which carried out the review for TeliaSonera, found no evidence of bribery or money laundering, but said “the suspicions of crime expressed in the media and by the Swedish Prosecution Authority cannot be dismissed by this investigation.”
Biörn Riese, a lawyer for Mannheimer Swartling, “notes that the transactions have been surrounded by so many remarkable circumstances that at least someone should have reacted to the lack of clarity regarding the local partner,” the firm said in a February 1 statement.
“If one carries out business in a corrupt country, one should quite simply be more thorough than TeliaSonera has been,” Riese said.
Last month documents surfaced showing TeliaSonera knew it was dealing with Karimova, who has been described in US diplomatic cables released by WikiLeaks as a “robber baron,” for the way she uses her father’s leverage to take over profitable businesses in Uzbekistan.
Russian telecoms giant MTS has filed for bankruptcy in Tashkent amid its long-running dispute with the Uzbek government, which is currently embroiled in telecoms scandals on several fronts.
MTS’s Uzbekistan subsidiary O’zdunrobita has petitioned for bankruptcy due to its “inability” to carry out a November court ruling ordering it to pay fines and penalties of $600 million, MTS said in a January 16 statement.
The company’s troubles began last July, when Tashkent accused it of using equipment illegally, then brought tax evasion charges, and finally shut it down.
In September, a court ordered MTS’s assets in Uzbekistan seized. To the surprise of many, that ruling was overturned on appeal in November. But with the good news came a catch: The court that overturned the assets seizure ordered MTS to pay penalties of $600 million – the approximate value of the assets the court had just returned. Some $150 million has already been seized from its bank accounts in Uzbekistan, MTS says.
MTS has protested its innocence, condemning the affair as the kind of assets grab not uncommon in Uzbekistan’s murky business climate – a charge Tashkent denies.
As a probe into allegations of shady payments in Uzbekistan by a Swedish-Finnish telecoms firm continues, fresh accusations have surfaced linking the deal directly to Gulnara Karimova, daughter of President Islam Karimov, whose name has repeatedly emerged in connection with the controversy.
Swedish broadcaster SVT -- which this fall broadcast the exposé that sparked the opening of a corruption investigation in Sweden involving TeliaSonera’s acquisition of the rights to operate in Uzbekistan -- says it has interviewed two senior TeliaSonera executives who linked Gulnara Karimova to the agreement allowing the company to enter Uzbekistan’s lucrative cellphone market.
“To reach a deal with Gulnara was a prerequisite to the whole deal,” one executive (both requested anonymity) told SVT’s “Uppdrag granskning” program. The executives said TeliaSonera officials traveled to Uzbekistan in 2007 to negotiate with the president’s daughter, who has extensive economic interests in Uzbekistan. (One WikiLeaked US Embassy cable describes her as a “robber baron.”) Karimova, who casts herself a sultry pop diva and fashion designer, and is her country's permanent representative to the UN in Geneva, has not commented on any of the corruption allegations.
One of the sources linked Karimova to Bekhzod Akhmedov, formerly a major player on the Uzbekistan’s telecoms market and currently the prime suspect in a separate money-laundering probe under way in Switzerland.