Leading Russian mobile operator leaves troubled Uzbek market

Major Russian mobile operator Mobile TeleSystems (MTS) has abandoned its stake in a lucrative joint venture in corruption-prone Uzbekistan, the Central Asian country’s communications ministry said late on Friday.

The ministry’s announcement, which the company also confirmed Friday, said the state-owned Center of Radio Communication, Broadcasting and Television had become “sole owner” of the pair’s joint venture after MTS sold off its 50.01 percent stake.

Neither MTS nor its erstwhile partner in Uzbekistan mentioned the size of the transaction, which comes amid an extended probe by Western investigators into corruption in the republic’s telecommunications sector.

MTS Vice-President Andrei Smelikov said Friday the sale of its stake in the Universal Mobile Systems venture was due to “a variety of business reasons and other circumstances” but did not reference any probe specifically.

MTS is cooperating with US authorities in an investigation into bribery allegations believed to be linked to Uzbek President Islam Karimov’s oldest daughter Gulnara Karimova.

The Russian company had only returned to the Uzbek market in 2014 after a court in the authoritarian country expropriated it of its interests in another venture in 2012.

Amsterdam-headquartered VimpelCom, a major competitor for MTS in the key Russian market, in February agreed to shell out almost $800 million in penalties to European and US regulators after admitting bribing Karimova.

Karimova, who released pop songs under her stage name Googoosha as well as branded clothing and perfume lines was once thought to be a potential successor to her 78-year-old strongman father.

But her stock has since fallen amid reports she has been under house arrest for the last two years in connection with a criminal investigation and presumed power struggle in the ex-Soviet republic of over 30 million people.

Swedish-Finnish operator TeliaSonera is the third company subject to investigation by the US Justice Department over its Uzbekistan operations, which are also being probed by Swedish authorities.