Russia’s MTS to pay $850 million to settle corruption case in Uzbekistan

TASHKENT (TCA) — Mobile TeleSystems (MTS), Russia’s largest cell provider, will pay $850 million to settle a bribery and corruption case tied to the daughter of Uzbekistan’s late president. The payment is part of settlements reached with the U.S. Justice Department and the Securities and Exchange Commission. The company’s shares are traded on the New York Stock Exchange, which is why U.S. agencies have oversight of it, RFE/RL reported.

Moscow-based MTS said on March 7 that it has reached a resolution with the U.S. Department of Justice and a settlement with the U.S. Securities and Exchange Commission relating to previously disclosed investigations concerning MTS’ former subsidiary in Uzbekistan.

These agreements mark the closure of the investigations into the Company’s acquisition and operation of its former subsidiary in Uzbekistan during the period from 2004 to mid-2012. In connection with the agreements, MTS will pay the aggregate amount of USD 850 million, the company said, adding that by entering into the DOJ resolution and the SEC settlement, MTS affirmed its commitment to ensuring that its business policies, processes and procedures strictly comply with all relevant anti-corruption legislation.

Alexey Kornya, MTS’ President and Chief Executive Officer, commented: “Obtaining a resolution of the Uzbek investigations was in the Company’s best interests. The resolution and settlement allow MTS to focus fully on the implementation of MTS’ business strategy to be a first-in-class digital telecom company. MTS’ balance sheet remains strong and the current ratio of the Company’s debt to OIBDA remains well below most of our Russian and international peers.”

The Securities and Exchange Commission said that MTS had bribed an Uzbek official related to then-President Islam Karimov to get licenses and expand business operations in Uzbekistan, RFE/RL reported.

“The company engaged in egregious misconduct for nearly a decade, secretly funneling hundreds of millions of dollars to a corrupt official,” the commission said in a statement.

Neither MTS nor the Securities and Exchange Commission named the official in question.

However, court records and other documents have confirmed the official in question is Gulnara Karimova — the elder daughter of President Karimov, who died in 2016.

Sergey Kwan


Sergey Kwan has worked for The Times of Central Asia as a journalist, translator and editor since its foundation in March 1999. Prior to this, from 1996-1997, he worked as a translator at The Kyrgyzstan Chronicle, and from 1997-1999, as a translator at The Central Asian Post.
Kwan studied at the Bishkek Polytechnic Institute from 1990-1994, before completing his training in print journalism in Denmark.

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