By Maria Kiselyova
MOSCOW, March 12 Russian mobile phone operator
Vimpelcom has become the latest company to come under
scrutiny over its operations in Uzbekistan, an authoritarian
country where rival MTS had its assets confiscated.
U.S.-listed Vimpelcom, Uzbekistan's biggest mobile operator
by subscribers, said on Wednesday that it was being investigated
by the U.S. Securities and Exchange Commission (SEC) and Dutch
The case follows an investigation by Swedish prosecutors of
TeliaSonera's operations in Uzbekistan which centres
around allegations that it had paid around $350 million for its
Uzbek 3G licence to a company it knew was a front for the
daughter of Uzbek president Islam Karimov, Gulnara Karimova.
President Karimov has ruled the gas-rich republic, central
Asia's most populous country, with an iron hand since it gained
independence from the Soviet Union in 1991 and several foreign
companies have had problems there.
The investigation into Vimpelcom comes as Russia and the
U.S. have the worst crisis in relations since the end of the
Cold War following Russia's military incursion into Ukraine's
Crimea region. U.S. President Barack Obama has called for
sanctions against Moscow.
"People are wondering what form financial sanctions will
take in the U.S. (and trying to) connect the dots that way...
whether the U.S. regulators will tighten up the environment
around former Soviet corporates," said Standard Bank analyst
The SEC was not immediately available to comment.
Sberbank analyst Anna Lepetukhina said the probe into
Vimpelcom, in which Russia's Alfa Group and Norway's Telenor
are the biggest investors, was likely a sequel to the
investigation into TeliaSonera.
In 2012, Vimpelcom said it did not rule out that it may
become subject to investigations due to its relationship with
Gibraltar-based Takilant Ltd from which TeliaSonera bought the
Takilant held a minority interest in Vimpelcom's business in
Uzbekistan from 2007 until 2009, and Vimpelcom had worked with
Takilant to acquire frequency spectrum in Uzbekistan.
On Wednesday, Vimpelcom said it had received a letter from
the SEC on March 11 stating that it was conducting an
investigation related to the company and requesting documents.
The company also said its headquarters in Amsterdam was
visited on March 11 by representatives of Dutch authorities
including the public prosecutor's office, who took documents and
informed Vimpelcom it was the focus of a criminal investigation
in the Netherlands.
"The investigations appear to be concerned with the
company's operations in Uzbekistan. The company intends to fully
cooperate with these investigations," Vimpelcom said in a
statement. A spokesman declined to elaborate.
Dutch prosecutors confirmed the criminal investigation into
Vimpelcom but declined to give any details.
Separately, Switzerland's public prosecutor said the Uzbek
president's daughter is being investigated on suspicion of money
laundering in connection with funds held in Switzerland
allegedly linked to irregularities in Uzbekistan's telecom
The Vimpelcom investigation follows poor results at the
telecoms operator and its decision to slash dividends that have
knocked a third off its stock market value since the beginning
of this year. Its Nasdaq-listed stock was down 2.4 percent in
early New York trading on Wednesday, taking the drop since the
start of the year to 32.5 percent.
Last year, Uzbekistan's tax authorities investigated
Vimpelcom's mobile unit, Unitel, but the probe did not reveal
any major violations, a Vimpelcom spokesman said.
That investigation followed the confiscation of all assets
owned by the Uzbek subsidiary of its bigger Russian rival MTS in
a criminal case against its local staff.
MTS took a $1.1 billion write-off in 2012 after an Uzbek
court revoked its local operating licence in a case that MTS
called a "classic shakedown" of foreign investors.
Vimpelcom has 10.5 million subscribers in Uzbekistan, out of
220 million in total across Russia, Italy and various emerging
VTB Capital analyst Ivan Kim said he did not expect the
investigation to have a significant direct financial impact
although he did not rule out the possibility of a fine or
"The investigation will indeed distract management, which
is currently trying to fix the business... The story is set to
further weaken sentiment towards the name around equity and
bondholders," Kim said.