Report: Russia’s VimpelCom owner may pay $775 mln on Uzbek case

MOSCOW, Nov 26 (PRIME) -- VimpelCom Ltd., the sole owner of Russian mobile operator VimpelCom, is in talks to pay about U.S. $775 million, a near record, to settle U.S. allegations it paid bribes in Uzbekistan to win business, Bloomberg reported late Wednesday, quoting three people familiar with the matter.

The Amsterdam-based company’s resolution with the Justice Department and the Securities and Exchange Commission could be announced in January, the sources said.

The U.S., along with Dutch, Swedish and Swiss authorities, have spent years probing graft allegations connected to Uzbekistan and Gulnara Karimova, the elder daughter of the Uzbek president, in awarding access to the country’s market, according to court documents and people familiar with the matter.

The Justice Department, in a civil forfeiture complaint filed earlier this year in New York, alleged VimpelCom Ltd., which is traded on the NASDAQ exchange, and a rival company made more than $500 million in corrupt payments.

VimpelCom Ltd. set aside $900 million earlier this month for potential liabilities stemming from Dutch and U.S. investigations. Negotiations with U.S. authorities are ongoing and the amount as well as the timing of the settlement could change, one of the sources said.

A $775 million penalty would be the second-largest levied by the U.S. for violations of the Foreign Corrupt Practices Act, which bans bribing officials to win business. The largest, $800 million, was paid by Siemens, which pleaded guilty to violating U.S. anti-corruption laws in 2008. French power company Alstom last year paid a $772 million criminal fine to the Justice Department after pleading guilty to charges related to contracts in Indonesia.

U.S. prosecutors, in documents filed in that case, detail what they said were corrupt business deals between VimpelCom Ltd. and Takilant Ltd., a Gibraltar-registered company controlled by “a relative of the president of Uzbekistan.” Karimova is not mentioned by name, but she is the relative in question, according to two people involved in the probes.

Swiss prosecutors and police raided Karimova’s Geneva mansion in 2013 as they searched for evidence in their own investigation of suspected money-laundering and fraud offenses related to telecommunications contracts in Uzbekistan. Karimova, a former permanent representative to the U.N. in Geneva, is under house arrest in Uzbekistan, according to news reports, including by the BBC and The Guardian.

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