8 March 2019
US prosecutors Thursday reached an US$850 million settlement with Russia’s leading telecoms firm over huge bribes paid to the family of Uzbekistan’s former president. MTS, based in Moscow is listed on the New York Stock Exchange. The Justice Department alleged that the corrupt money was laundered through the U.S. financial system.
MTS had a subsidiary in Uzbek which had 8.5 million subscribers. Uzbek government seized the company’s local subsidiary in 2012 and cancelled its operating licenses for alleged tax evasion. In 2013 the subsidiary filed for bankruptcy.
An investigation by the Organized Crime and Corruption Reporting Project (OCCRP) revealed that MTS paid bribes to companies owned by former president Islam Karimov’s daughter Gulnara, in 2004 and 2007 to purchase stakes in the company. OCCRP said alleged that Karimova squeezed more than $1 billion in bribes from international telecom-related companies.
The SEC said the MTS was engaged in corruption for over a decade in Uzbekistan by paying hundreds of millions of dollars to a corrupt official.
Gulnara Karimova was at one point believed to be an heir to Karimov (in picture) and the presidency. But she disappeared from the public eye in 2014. He father and former president died in 2016. Uzbek prosecutors subsequently confirmed she was under house arrest and being investigated for corruption and other charges. Later a court found she had violated the terms of her house arrest and ordered her sent to prison. The United States has indicted her on corruption charges for allegedly using her official position to solicit more than $865 million in bribes from three telecommunications companies, the Justice Department said on Thursday. Radio Free Europe reported.
USA: Russia telecoms giant MTS fined $850 m in US corruption case
8 March 2019