Tag Archives: Uzbekistan

Telenor manager quits due to Uzbek corruption incident

MAY 9 2016 (The Conway Bulletin) – Norwegian telecoms company Telenor said that its deputy chair- man Frank Dangeard had stepped down as the company continued to grapple with corruption allegations over VimpelCom’s dealings in Uzbekistan. Telenor owns a 33% stake in Amsterdam-based, Russian telecoms operator VimpelCom. Telenor wants to sell its stake in VimpelCom, valued at around $2b.

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(News report from Issue No. 280, published on May 13 2016)

Western Uzbekistan faces salary problems

MAY 11 2016 (The Conway Bulletin) – Last year, teachers in Nukus, in western Uzbekistan, received chickens, potatoes and carrots in lieu of their salaries because the authorities had run out of cash to pay them, RFE/RL reported. Wage arrears and liquidity shortages have become commonplace in Uzbekistan. Last week, teachers in Tashkent complained that they had not received salaries for two months. An economic downturn has hit Uzbekistan and its neighbours in Central Asia hard.

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(News report from Issue No. 280, published on May 13 2016)

GM Uzbekistan’s car sales to Russia fall in April

MAY 12 2016 (The Conway Bulletin) – Sales of GM Uzbekistan’s cars to Russia fell 5% in April compared to the same month last year, dashing hopes raised last month that sales were starting to improve.

Russia is GM Uzbekistan’s biggest market, leaving it badly exposed to a Russian economic recession.

Car sales to Russia had started to pick up in February and March for GM Uzbekistan, a joint venture between US-based GM and state owned UzAvtosanoat, raising hopes that the worst of the economic down- turn had been weathered.

But data from the Moscow-based Association of European Businesses (AEB), which publishes monthly sales numbers in Russia, said GM Uzbekistan had sold just 1,571 units in April, down from 1,677 in March. As a comparison, this is around a third of the sales number of the same month in 2012.

Joerg Schreiber, AEB chairman said, that the outlook wasn’t any better.

“The volume of absolute sales [in Russia] has fallen to the lowest level in 10 years,” he said in a statement.

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(News report from Issue No. 280, published on May 13 2016)

Huawei and Uzbek telecom start JV

MAY 9 2016 (The Conway Bulletin) – China’s Huawei Technologies and Uztelecom, Uzbekistan’s state owned telecoms company, said they will start a joint venture, called Broadband Solutions, to produce telecoms kits. The new company will be based in the Jizzak special economic zone, around 100km northeast of Samarkand. Uztelecom will take a 51% stake in the joint venture, Huawei will own the rest. The deal valued the company at around $6m.

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(News report from Issue No. 280, published on May 13 2016)

Editorial: Uzbek state salaries

MAY 6 2016 (The Conway Bulletin) – Paying salaries on time to its armies of state employees is one of the Uzbek government’s central tasks. If it doesn’t, it means there are some serious cracks in the system.

According to news reports, arrears for salaries in Uzbekistan now extend to a couple of months for teachers in schools and colleges.

There is a heavy economic crisis blowing through Central Asia and the South Caucasus, but where is the government’s money in Uzbekistan?

Some sources say it is being funnelled into short-term construction and renovation projects ahead of the summit of the Shanghai Cooperation Organisation coming up in June.

Last year, a leaked letter sent from the Central Bank said that the budget was short of around $620m.

Reports from Turkmenistan, another reclusive country, said that the government had been paying salaries in kind or with vouchers to some of its employees for months.

These are tough times for many Central Asians.

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(Editorial from Issue No. 279, published on May 6 2016)

Business comment: Corruption in telecoms

MAY 3 2016 (The Conway Bulletin) – Telia Company, the re-branded version of Swedish company TeliaSonera, scored a small victory this week as Swedish prosecutors dropped a bribery case related to its dealings in Azerbaijan in 2008.

Allegedly, it paid bribes to public officials to obtain licences for its subsidiary, Azercell, but prosecutors said they couldn’t prove their claims.

This, though, still leaves Telia, and other companies, entangled in an investigation linked to corruption in Uzbekistan, where they allegedly paid hundreds of millions of US dollars to obtain licences.

The beneficiary of the bribes is said to be Gulnara Karimova, the once-extravagant eldest daughter of Uzbek President Islam Karimov.

VimpelCom, an Amsterdam- based Russian company, has already settled its Uzbek bribery case with US and Dutch courts by paying a penalty of $795m, effectively admitting wrongdoing.

The Uzbek case had negative repercussions across Scandinavia.

In Sweden, perhaps in an effort to erase recent memories, TeliaSonera changed its name, colours and branding and is now registered as Telia Company.

In Norway, heads started rolling last year at the state-owned telecoms company Telenor, which owns 33% in VimpelCom.

CEO Svein Aaser was sacked in November and the Norwegian former CEO of VimpelCom Jo Lunder was arrested a few days later.

Last autumn, both Telia and Telenor said they wanted out of their operations in the South Caucasus and Central Asia, allegedly because of market pressures, but their exit, rebranding and apologies can only really be read as last minute attempts to pull their hands out of the cookie jar.

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(News report from Issue No. 279, published on May 6 2016)

Cash shortage spreads to Uzbek capital

MAY 2 2016 (The Conway Bulletin) – Several employees at state-owned companies in Tashkent have not received payment since February, according to sources interviewed by Eurasianet. This is a sign that a shortage of hard currency, previously confined to the provinces, has spread to Uzbekistan’s capital. Wage arrears cause distress among the population. Last year, a leaked letter from the Central Bank revealed a shortfall of 1.5 trillion sum ($517m at the official rate) in the state budget.

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(News report from Issue No. 279, published on May 6 2016)

Sweden drops Telia bribery case in Azerbaijan

MAY 3 2016 (The Conway Bulletin) – Prosecutors in Sweden dropped an investigation into alleged bribe paying by TeliaSonera, now called Telia Company, in Azerbaijan, relieving the pressure on the Nordic region’s biggest telecoms company but disappointing corporate governance campaigners.

Scrapping the investigation also ditches a potentially embarrassing public hearing for Azerbaijani President Ilham Aliyev and his family into their personal affairs. TeliaSonera was alleged to have paid millions of dollars indirectly to Mr Aliyev and his family for access to Azerbaijan in 2008.

Prosecutors said they could neither prove the bribery allegations nor Telia’s intent.

Allegations of the payment emerged in mid-2014, nearly two years after TeliaSonera was accused of paying a $375 million bribe to Gulnara Karimova, the eldest daughter of Uzbek President Islam Karimov, for access to Uzbekistan.

“With the tools we have at our disposal, we can’t prove bribery,” Gunnar Stetler, Sweden’s prosecutor, told Reuters in an interview.

Telia said the ruling marked another departure from the company’s more murky past.

“After today’s decision, there are no ongoing Swedish investigations that relate to Telia Company, except for the investigation regarding Uzbekistan,” Telia said in a statement.

Telia is linked to investigations in Sweden, the Netherlands, the US, Switzerland and Norway into alleged corruption linked to Ucell, its subsidiary in Uzbekistan.

Last September, Telia said it wanted to sell off its assets in the South Caucasus and Central Asia. Turkish telecoms company Turkcell, in which Telia owns a stake, said it was interested in buying some of these companies.

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(News report from Issue No. 279, published on May 6 2016)

Uzbekistan Airways passengers drop

MAY 3 2016 (The Conway Bulletin) – State-owned Uzbekistan Airways said it transported 535,600 passengers in the first quarter of 2016, a 6.8% reduction compared to the same period last year. The company also said it reduced the number of flights by 9.8% to 5,007. The biggest cut has been to Uzbekistan Airways’ internal routes, a sign, perhaps, of a weaker domestic economy.

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(News report from Issue No. 279, published on May 6 2016)

Taliban threatens Uzbekistan

MAY 2 2016 (The Conway Bulletin) – Taliban forces attacked a border post in Afghanistan in the Kaldar district just a few kilometres south of the border with Uzbekistan. The Uzbek government has long feared a spillover of fighting between Taliban or other rebel forces and Afghanistan’s army into its southern regions.

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(News report from Issue No. 279, published on May 6 2016)