Tag Archives: corruption

Editorial: Corruption in Georgia

MAY 13 2016 (The Conway Bulletin) – Georgian PM Giorgi Kvirikashvili said at an anti-corruption conference in London last week that he would “explore” the possibility of setting up a database in Georgia that would mean all companies will need to reveal their secret beneficiary owners.

If Mr Kvirikashvili is serious then now is the time for his to move and fast. He has a real opportunity to chisel a niche for Georgia and to set the pace as a global leader in the fight against corruption.

It’s a theme that is very in-vogue at the moment and also one that should play nicely to audiences in the West that Georgia is trying to impress. These are mainly NATO members and European Union member states. Georgia wants to join both clubs and if Mr Kvirikashvili can fund, organise and manage a meaningful database that improves transparency in business, he should impress his potential suitors.

Mr Kvirikashvili needs to be brave and move from exploring options on setting up a database outlining companies’ real beneficiaries to actually doing it.

ENDS

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

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.

ENDS

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

Georgian PM attends anti-corruption summit

MAY 12 2016 (The Conway Bulletin) – At an anti-corruption summit organised in London by British PM David Cameron, Georgian PM Giorgi Kvirikashvili said his government will consider creating a public register of company information that includes data on beneficial owners. He also said that the government will set up partnerships with other countries to improve cooperation between different intelligence agencies.

ENDS

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

ENDS

(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.

ENDS

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

Telenor official quits after Uzbek bribery investigation

MAY 3 2016 (The Conway Bulletin) – Norwegian telecoms company Telenor said its CFO Richard Olav Aa and General Counsel Pal Wien Espen resigned after an internal investigation on alleged corruption at VimpelCom — of which Telenor owns 33% — in Uzbekistan. The investigation concluded that although there had not been any corruption within Telenor, weak structures within the company had allowed corruption within VimpelCom to exist. In February, VimpelCom admitted to paying $115m in bribes to officials in Uzbekistan.

ENDS

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

US prosecutors finally name Uzbek Pres. daughter in corruption probe

APRIL 22 2016 (The Conway Bulletin) – The US named Gulnara Karimova, the eldest daughter of Uzbekistan’s President Islam Karimov, as the beneficiary of bribes worth $550m taken between 2007 and 2013 from telecoms companies wanting access to the Uzbek market.

This was the first time that Ms Karimova, 43, has been named in connection with the corruption case since news of the deals became public three years ago.

It’s also a reminder of just how tightly President Karimov and his family ran Uzbekistan, seemingly viewing it as their personal fiefdom, and how telecoms companies, from Sweden’s TeliaSonera to US-listed VimpelCom, had to bribe their way into the market of 30m people.

TeliaSonera rebranded as Telia Company earlier this month. Both Telia and VimpelCom are the subject of investigations in the corruption cases. Telia is also trying to sell off its subsidiaries in Central Asia and the South Caucasus.

A Bloomberg News report from New York said that prosecutors had named Ms Karimova after previous requests to recover cash, which they said had been laundered, were ignored.

“Prosecutors made the request in a letter to a Manhattan federal court judge on Thursday (April 21), saying Karimova and the group failed to respond to a civil forfeiture complaint against three bank accounts,” Bloomberg reported.

Ms Karimova had previously only been referred to, rather obliquely, as: “Government Official A, a close relative of a high-ranking Uzbek government official.”

Being named in the reports will bring further international notoriety on Ms Karimova.

She had once been spoken of as a future leader of Uzbekistan, a label she appeared to wear lightly while she produced pop videos, hosted fashion shows and concocted her own perfume range.

Now Ms Karimova has disappeared from public sight, having been placed under house arrest in Tashkent two years ago.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Sariyev quits as Kyrgyz PM to fight corruption allegations

APRIL 11 2016, BISHKEK (The Conway Bulletin) — Temir Sariyev quit as Kyrgyzstan’s PM, less than a year after taking the job, after he was accused of corruption over a roadbuilding contract.

Three days later parliament voted in Sooronbai Jeenbekov, considered a heavyweight politician from Osh and loyal to President Almazbek Atambayev, as the new PM.

Emil Juraev, a professor at the American University of Central Asia, said Mr Jeenbekov may have been handed the PM job because he is able to unify bickering north-south factions.

“The new PM is a figure that suits all interested parties,” he said. “He is less ambitious and autonomous, compared to Sariyev.”

Still, Mr Jeenbekov is Kyrgyzstan’s sixth PM since a new constitution that handed more power to parliament was imposed in October 2010, highlighting just how fractured the Kyrgyz political landscape is.

On the streets of Bishkek, the frustrations of ordinary Kyrgyz that another PM had lasted less than a year were evident. Kablanbek, 60, said that he was disappointed to see Mr Sariyev go already.

“He should have worked for at least two-three years. Quitting after one year in office was a terrible idea,” he said.

At the centre of the latest corruption allegation to hit Kyrgyz politics was a contract Mr Sariyev handed to a Chinese company last year.

Mr Sariyev has denied that there was any corruption involved. Giving a resignation speech at this final government meeting, he said that he was the victim of lies and intrigue.

“I have neither time nor intention to play such political games,” he said. But many people held a different view. They have become cynical of Kyrgyz politicians and high levels of corruption. Daniyer, a 25-year-old student, reflected the views of many when he said: “In such positions, everyone tries to seize the opportunity to rob the country.”

ENDS

(News report from Issue No. 276, published on April 15 2016)

Business comment: Panama’s Pandora’s Box

APRIL 8 2016 (The Conway Bulletin) – The leaking of millions of documents from the Panama-based law firm Mossak Fonesca, dubbed the Panama Papers, hit the headlines this week both for the number of secret documents it disclosed and for the profiles of those involved in hiding money in offshore accounts.

For the Central Asia/South Caucasus region, one important story is the large-scale involvement of the Azerbaijani Presidential family in the country’s gold business.

Investigations on the awarding of the Chovdar project contract to a consortium of offshore companies had already unveiled that Ilham Aliyev’s family was behind Globex International, which owned 11% of the venture.

The latest leaks, though, showed that Mr Aliyev’s daughters, Leyla and Arzu, in fact, also owned Panama-registered Londex Resources, which owned another 45% of the project.

This makes the presidential family the majority owner, with a combined stake of 56%, of a project that holds gold reserves previously valued by the government at around $2.5b.

Other important figures from the South Caucasus and Central Asia, such as Georgian billionaire and former PM Bidzina Ivanishvili and Nurali Aliyev, grandson of Kazakh President Nursultan Nazarbayev, were also revealed to have hidden money in offshore accounts.

But this, although morally questionable, is not an illegal practice.

What is suspicious, and unfair, is when the Azerbaijani government awards the Presidential family’s unknown offshore companies a very favourable gold contract.

ENDS

(News report from Issue No. 275, published on April 8 2016)

UAE extradites Alimbetov to Kazakhstan

APRIL 5 2016 (The Conway Bulletin) – A court in the UAE extradited to Kazakhstan Mirkhat Alimbetov, former head of Kakadu, a construction company accused of embezzling around $3m from government tenders. Mr Alimbetov is now being held in a prison in Astana before his trial. He has been on the run since 2009.

ENDS

(News report from Issue No. 275, published on April 8 2016)