VimpelCom facing investigations over Uzbekistan

VimpelCom facing investigations over Uzbekistan

12 MAR 2014

Operator VimpelCom is being investigated by US and Dutch authorities in connection to its operations in Uzbekistan.

The company said in a statement that it received a letter from the United States Securities and Exchange Commission yesterday requesting documents and indicating that the body is conducting an investigation.

In addition, the operator group’s head office in Amsterdam was visited by Dutch authorities — including a representative from the public prosecutor office. The officials obtained documents and informed VimpelCom that it is “the focus of a criminal investigation” in the Netherlands.

VimpelCom said the investigations “appear to be concerned with the company’s operations in Uzbekistan” and that it fully intends to cooperate on the matter.

VimpelCom has 10.5 million subscribers in Uzbekistan, generating $676 million in revenue in 2013, around 3 per cent of total company sales. It entered the market in 2006.

The group last week reported a net loss of $2.7 billion for the fourth quarter of 2013 following the write down of $2.1 billion of assets in the Ukraine. Only its operations in the Commonwealth of Independent States region, which includes Uzbekistan, saw revenue growth during Q4 and 2013 as a whole.

Nordic operator group TeliaSonera was previously embroiled in controversy related to its operations in Uzbekistan, with a probe into whether it was aware that the money it spent to acquire an operating licence in the country in 2007 went to the family of Uzbek president Islam Karimov.

TeliaSonera’s CEO Lars Nyberg resigned after a Swedish law firm hired to investigate the issue criticised the company for not making sufficient effort to investigate the local partner or how it “could hold the rights that were later transferred”.

Author

Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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