Tashkent Economic Court rules to recall all licenses of MTS subsidiary
TASHKENT. Aug 13. (Interfax) - The Economic Court of Tashkent resolved on Monday to revoke all of the licenses belonging to OJSC Mobile TeleSystems (MTS) subsidiary LLC Uzdunrobita, a source at Uzbekistan's State Agency for Communications and Information (SACI) told Interfax.
The court's decision was rendered on a lawsuit brought by SACI against Uzdunrobit, which is accused of allowing its affiliates to operate without individual licenses. SACI claims that in failing to pay licenses fees, Uzdunrobita caused $210 million in damages to the government. In addition, the company's branches illegally earned $161 million for the sale of Uzdunrobita's services.
MTS said the regulator's claims that the branches operated illegally have no legal basis and contradict official documents, including those previously issued to Uzdunrobita by SACI itself.
The license agreement issued to Uzdunrobita in 2004, which was signed by Abdullah Aripov, the head of SACI at the time and currently Uzbekistan's deputy prime minister, expressly states that the license applies to all branches of Uzdunrobita for its duration regardless of when these branches were established, and a list of the branches in question was attached to the agreement as an addendum, MTS said.
Uzdunrobita's current branch structure was established in 1997, when the company's main owner was SACI. MTS has not changed that structure since then.
This past spring, Uzbekistan's prosecutor and tax authorities carried out a comprehensive audit of Uzdunrobita and found "misuse of funds, theft of property, as well as illegal schemes to cash funds and evade taxation."
Following this, various local authorities began to make claims against the company. The State Communications Inspectorate in June warned the MTS subsidiary that its license might be suspended or revoked due to infractions in its operations. Uzdunrobita's license was suspended on July 18 for a period of ten days, and on July 30 the suspension was extended for three months.
Last week, 16 territorial subdivisions of Uzbekistan's Anti-Monopoly Committee simultaneously found Uzdunrobita and its branches in violation of anti-monopoly law, consumer protection law and advertising law. They fined the company more than $80 million combined.
At present, the total amount of claims against the company by the prosecutor's office, SACI and the Anti-Monopoly Committee is approximately $830 million.
