VimpelCom agrees USD795m settlement in Uzbek bribery case

19 Feb 2016

US-listed, Amsterdam-based telecoms group VimpelCom Ltd yesterday admitted to paying more than USD114 million in bribes to an Uzbekistan official and agreed to pay over USD795 million in civil and criminal penalties to US and Dutch authorities, the Wall Street Journal (WSJ) reports. VimpelCom, which is controlled by Russian shareholders, and its Uzbek subsidiary were charged with violating a US law barring the bribery of foreign officials in exchange for business. The subsidiary pleaded guilty on Thursday and the charge against VimpelCom will be dropped after three years if the company abides by settlement terms including retaining a corporate monitor, the WSJ adds. The agreed payments include USD167.5 million to the US Securities and Exchange Commission (SEC), USD230.1 million to the US Department of Justice and USD397.5 million to Dutch regulators. According to the SEC, VimpelCom paid bribes to a government official ‘related to the President of Uzbekistan’ and hid them through sham contracts, fake invoices and charitable contributions. In a statement, VimpelCom CEO Jean-Yves Charlier said: ‘The wrongdoing, which we deeply regret, is unacceptable. We have taken, and will continue to take, strong measures to embed a culture of integrity across the group.’

The WSJ reports that prosecutors also sought the forfeiture on Thursday of more than USD550 million in alleged illegal bribes held in Swiss bank accounts of the unnamed Uzbek official in question (said to be Gulnara Karimova, the elder daughter of Uzbek President Islam Karimov, according to people familiar with the matter cited by the WSJ). The sum represents additional bribes allegedly paid by two other companies, US officials said, adding that they would work with foreign authorities to return the USD550 million to victims in Uzbekistan. Assistant Attorney General Leslie Caldwell said that investigations are ongoing, whilst settlements have not been reached with two other telecoms groups subject to related inquiries, TeliaSonera and Mobile TeleSystems (MTS), the WSJ writes.

Russia, Uzbekistan,Beeline (Unitel), VEON (formerly VimpelCom),

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