Uzbek Court Confiscates Russian Mobile Operator Assets

The Tashkent Criminal Court in Uzbekistan has imposed suspended sentences or fines on four managers of LLC Uzdunrobita, the Uzbekistan-based subsidiary of leading Russian cellular provider Mobile TeleSystems (MTS), and confiscated the subsidiary's property in favor of the state. The defendants were accused of "organizing a criminal group with the purpose of extracting uncontrolled profits." Earlier the Uzbek tax authorities claimed some $900 mln of back taxes from the MTS subsidiary and cancelled its licenses. Michael Hecker, MTS's vice president for strategy, called the license-related court session a "20-minute show" that represented a "clear violation of the basic rights to a fair trial and due process." "We invested over $1 billion into the company. We believe somewhere in this area is also the equity value of the company. And it becomes very clear that all the fabricated amounts that we are due to pay according to those statements of the Uzbek authorities -- that they equal, more or less, the equity value, because then [the government] will just simply expropriate the company," Hecker said. "They will basically say, 'We'll take the company and that's it.'"

http://www.interfax.com/newsinf.asp?id=361230
http://www.lenta.ru/news/2012/09/17/mts/
http://www.rferl.org/content/uzbek-branch-of-russian-mts-shut-down/24675789.html