MTS earmarked $ 850 million for future penalties for corruption in Uzbekistan

Cellular company MTS created a reserve of 55.8 billion rubles (about $850 million) “as a potential obligation in relation to the investigation of the US Securities and Exchange Commission (SEC) and the US Ministry of Justice.”

According to the media group RBK, it was stated in the presentation of financial results for the third quarter of 2018. A representative of the company explained that it is all about the investigation concerning the activities of MTS in Uzbekistan.

“The group continues to cooperate on issues related to the investigation. Nevertheless, there is no certainty of the form, terms and conditions for the possible resolution of the investigation,” he said. At the same time, the President of MTS Aleksei Kornya, at a press event, explained that “now the company has a clearer idea of the scope of possible obligations,” RBC correspondent reports.

In 2014, the US Justice Ministry and the SEC launched an investigation into corruption in Uzbekistan’s telecommunications market regarding MTS, Veon (in addition, it owns the Russian “VimpelCom”) and the Swedish Telia Company AB (prior to renaming “TeliaSonera”) since all three companies were trading on the American Stock Exchange.

The US law enforcement officials suspect that these companies paid for licenses through fake companies and bribed a person who is allegedly a relative of the Uzbek President Islam Karimov for frequencies. The name was not announced, but judging by the materials of the investigation, it was about a daughter of the President Gulnara Karimova. All suspicious transactions were made between January 2006 and October 2011.

In February 2016, VimpelCom agreed on the terms of an amicable settlement with the US authorities on the case and paid $ 795 million. In September 2017, Telia announced that the company would pay a fine as much as $ 965 million.