MTS claims possible pressure on Uzdunrobita staff
MOSCOW. July 30 (Interfax) - The Uzbek Prosecutor General's Office continues to investigate staff at local mobile phone operator Uzdunrobita - a wholly owned subsidiary of Russia's Mobile TeleSystems (MTS) , but the Russian operator says the questioning is being carried out in breach of procedural rules.
MTS said in an official statement that the General Prosecutor's Office may be putting pressure on staff to elicit confessions about accepting payments from MTS, which the prosecutor believes were bribes to conceal that equipment prices were too high.
The Russian company says that, according to its information, during the interrogations lawyers were not allowed in for several hours and only gained access when employees had signed confessions.
"Charges of commercial bribery obtained in this way against the subsidiary's employees are groundless and absurd. Uzdunrobita is a 100% subsidiary of MTS and the consolidated results of the MTS group depend directly on its financial results," the MTS official statement said.
MTS also said the payments were made as part of an incentive program adopted by the group in accordance with international standards.
"Uzdunrobita employees, citizens of Uzbekistan, obtaining payments in Russia, did not violate and are not violating any laws of Uzbekistan and did not commit any, never mind criminal, offense," MTS said, adding that it maintains the right to protect its employees and its interests with all available legal methods.
The Uzbek Prosecutor General's office has more than once announced that it ensures transparency in the investigation against Uzdunrobita employees, including Russian citizen Radik Dautov (interim general director of Uzdunrobita). "Criminal procedure legislation is scrupulously followed," the office said. The right to a defense is complied with and there have not been any major complaints from the lawyers, it adds.
Uzbekistan has already estimated the economic losses that what the prosecutor calls criminal activity of Uzdunrobita management could mean. At the end of 2011 the losses were estimated at 700 billion sum (over $368 million). The Uzbek Prosecutor General's Office reckons the losses were caused by the operator lowering the taxation base, making the cost of imported equipment and materials too high, concealment of foreign currency and illegal withdrawal of shadow incomes as well as carrying out activities without a license.
In the spring a comprehensive inspection of the company carried out by the prosecutor's office and tax bodies by the State Tax Committee, evidence of misuse of funds, theft of property, money laundering and tax evasion schemes was discovered.
After that various local authorities began to make complaints against the company. The Uzbek State Communications Inspectorate in June warned the Uzbek MTS subsidiary that its license could be suspended or revoked due to violations. The Uzdunrobita license was suspended on July 18, albeit temporarily for 10 days. The suspension ends Monday at 6:00 p.m., Moscow time.
The suspension came with a demand to stop providing services in Uzbekistan and as a result over 30% of the country's mobile phone customers faced difficulties transferring to other operators.
The mobile phone subscriber base in Uzbekistan, which has a population of 29.6 million, is over 25 million, compared to 19 million at the end of 2010. Of these 9.7 million were Uzdunrobita customers.
Uzdunrobita was formed in August 1991 and became the first mobile phone company in Uzbekistan. In August 2004, Uzdunrobita became part of OJSC Mobile TeleSystems. After rebranding in June 2006 the company began offering services under the MTS-Uzbekistan brand.
Before the MTS subsidiary's license was suspended there were five mobile phone operators working in Uzbekistan: three GSM operators - Uzdunrobita, Coscom (controlled by TeliaSonera) and Unitel (Vimpelcom subsidiary) and two CDMA operators - the joint venture RWC and Uzbektelecom Mobile (a branch of Uzbektelecom).
