Uzbek court overturns ruling to seize MTS assets

ALMATY, Kazakhstan (AP) ? Russia's largest mobile telecommunications company said Friday that a court in Uzbekistan has reversed a September ruling to seize assets belonging to its subsidiary in the Central Asian nation but also slapped it with a fine.

MTS said in an emailed statement that an appeals court in the capital, Tashkent, imposed a $600 million penalty to compensate for alleged tax evasion and embezzlement at the Moscow-based company's subsidiary, Uzdunrobita.

Uzdunrobita, which operates under the brand name MTS Uzbekistan, had suspended operations in mid-July at the request of Uzbek authorities, denying service to around 9.5 million customers, around two-fifths of the entire population.

The high-profile case has threated to derail attempts by Uzbekistan to attract international investors to the ex-Soviet nation, which has seen multiple state-led seizures of private businesses.

MTS said the Tashkent City Court appeals board ordered Thursday that it pay the $600 million penalty over eight months.

"We are satisfied that MTS's position was heard during the judicial process and that the company's demands have in part been met," MTS chief executive Andrei Dubovskov said in the statement.

Tashkent Criminal Court's order in September to confiscate Uzdunrobita's assets came in conjunction with the sentencing of four company managers to 2 ? in jail for embezzlement.

MTS said the verdict against the Uzdunrobita managers remains in force.

MTS says it has invested around $1.1 billion into its Uzbek business since buying a 74 percent stake in Uzdunrobita in 2004. It acquired the remaining stake in successive years.

Uzdunrobita was formerly owned by Gulnara Karimova, the daughter of Uzbekistan's President Islam Karimov.

Karimova sold the company to MTS in 2004 at what market watchers said was an above-market price.

Former Uzdunrobita business partner, Sanjar Umarov, has claimed Karimova pushed him out of the company.

Source: http://news.yahoo.com/uzbek-court-overturns-ruling-seize-mts-assets-074002984--finance.html

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