March 7, 2019 / 8:33 AM / 6 months ago

Russia's MTS to pay $850 million to end U.S. probe into Uzbek business

MOSCOW (Reuters) - Russia’s top mobile phone operator MTS has agreed to pay $850 million to settle U.S. bribery investigations into a former subsidiary in Uzbekistan, a U.S. regulator and the company said on Thursday.

MTS quit the Uzbek market in 2016 after coming under scrutiny from the U.S. Department of Justice and the Securities and Exchange Commission (SEC) as part of a broader investigation into telecom firms’ operations in Uzbekistan.

The SEC said on Thursday that MTS had agreed to pay a criminal fine and forfeiture in the amount of $850 million after the regulator found that it had bribed Uzbek authorities to win and retain business in the Central Asia republic.

Under the agreement, MTS will also retain an independent compliance monitor for at least three years.

The mobile operator, part of the Sistema conglomerate, said in November it had set aside around $850 million to cover the possible fallout from the case.

Ivan Kim, analyst at VTB Capital, said he expected the settlement to increase the company’s leverage but have no impact on dividends.

MTS’ Moscow-listed shares were down 1.18 percent in early trade, underperforming the broader index.

Reporting by Anastasia Teterevleva; writing by Maria Kiselyova; editing by Jason Neely

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