Telia receives $1.4 billion settlement offer from U.S., Dutch authorities for Uzbekistan bribes
Thursday, September 15, 2016 at 9:28AM
Richard L. Cassin in Gulnara Karimova, Islam Karimov, MTS Systems, Sweden, TeliaSonera, Uzbekistan, VimpelCom

Telia chairman Marie Ehrling image (courtesy of Telia)Sweden's Telia Company said Thursday it received a proposal from U.S. and Dutch authorities to pay $1.4 billion to settle allegations of overseas bribery.

The company said its initial reaction to the proposal "is that the amount is very high."

Telia chairman Marie Ehrling said Thursday the company's entry into Uzbekistan was "unethical and wrongful."

The telecoms company was formerly known as TeliaSonera. The governments of Sweden and Finland are the biggest shareholders.

Former CEO Lars Nyberg was forced out of the company when the bribery scandal broke in early 2013.

In February this year, Amsterdam-based VimpelCom paid $795 million to resolve U.S. and Dutch charges of bribing an Uzbek official.

The U.S. penalties of $397.6 million landed VimpelCom sixth on our list of the biggest Foreign Corrupt Practices Act enforcement actions in history.

Last year the DOJ filed civil forfeiture actions to recover nearly $1 billion in bribe money that VimpelCom, MTS of Russia, and Telia allegedly paid to Gulnara Karimova, the eldest daughter of Uzbek President Islam Karimov.

Karimova, 43, has been under house arrest in the Uzbek capital of Tashkent for corruption since September 2014. She hasn't been seen for several months and didn't attend her father's funeral this month.

The 78-year-old president died September 2 from a brain hemorrhage.

As many as 60 of Karimova's alleged associates have been convicted in Uzbekistan of financial fraud and sentenced to long prison terms.

In a ruling last year, U.S. District Judge Andrew Carter allowed the DOJ to impound $300 million held by Bank of New York Mellon Corp. in Ireland, Luxembourg, and Belgium, and in accounts at Clearstream Banking SA. The accounts were linked to companies in Luxembourg with ties to Karimova.

In 2014, prosecutors in Switzerland opened a money-laundering investigation into Karimova. The prosecutors seized about $820 million as part of the investigation.

The Swiss investigation reportedly includes allegations that Telia paid an intermediary -- Gibraltar-registered Takilant -- $320 million for 3G phone rights in Uzbekistan.

Takilant has been tied to Karimova.

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Here's Telia's September 15, 2016 release:

The U.S. and Dutch authorities have since the spring of 2014 investigated historical transactions related to Telia Company’s entry into Uzbekistan in 2007. On the evening of 14 September, Telia Company received new information from the authorities with proposals from them for a settlement with the company. The information received was general and did not go into much detail but suggests a total settlement amount of approximately $1.4 billion which corresponds to approximately SEK 12 billion for all investigations.

“I have said on many occasions in the past that Telia Company’s entry into Uzbekistan was done in an unethical and wrongful way and we are prepared to take full responsibility. We are cooperating fully with the authorities to bring clarity to the matter. With that said, our initial reaction to the proposal is that the amount is very high. We will now have to analyze the information and decide on how to proceed with the ongoing discussions with the authorities,” says Telia Company’s Chairman Marie Ehrling.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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