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Uzbek Diplomats Break Silence On Swiss Money-Laundering Case

Gulnara Karimova, daughter of Uzbek President Islam Karimov and Uzbekistan's permanent representative to the UN in Geneva, at the opening of the Golden Cheetah Tashkent Film Forum in September.
Gulnara Karimova, daughter of Uzbek President Islam Karimov and Uzbekistan's permanent representative to the UN in Geneva, at the opening of the Golden Cheetah Tashkent Film Forum in September.
By Daisy Sindelar
Uzbek diplomatic officials have offered rare commentary on a Swiss money-laundering case involving four Uzbek nationals with ties to Gulnara Karimova, the daughter of the Uzbek president.

Responding in writing to a request for information from the Swiss newspaper "Le Temps," the Uzbek Embassy for Switzerland, which is based in Berlin, gave few details about the case but offered speculation about the whereabouts of a missing businessman involved in the investigation.

In the letter, received on October 11, embassy officials accuse the businessman, Bekhzod Akhmedov, of massive fraud and suggest his Russian-based partners have helped him evade arrest.

Akhmedov, in addition to being involved in the Swiss investigation, is at the heart of an ongoing dispute between Uzbek authorities and the Russian mobile-phone operator MTS.

Akhmedov, who served as the head of MTS's Uzbek subsidiary, fled Uzbekistan this summer amid a dispute in which Uzbek officials revoked MTS's license and demanded nearly $1 billion in back taxes after leveling charges of financial wrongdoing.

MTS has accused the Uzbek authorities of making false allegations in order to strip the company of its assets.

Akhmedov's whereabouts is unknown. An Interpol warrant has been issued for his arrest at the request of the Uzbek government.

Globe-Trotting Intrigue

According to the letter from the Uzbek Embassy, a Tashkent court on September 17 found Akhmedov guilty in absentia of fraud and abuse of office.

The letter describes Akhmedov as "having authorized the embezzlement of criminal funds" generated by "illegal activities between 2008 and 2012."

The article in "Le Temps" includes Uzbek authorities' speculation about the whereabouts of a key figure in the case.The article in "Le Temps" includes Uzbek authorities' speculation about the whereabouts of a key figure in the case.
The article in "Le Temps" includes Uzbek authorities' speculation about the whereabouts of a key figure in the case.
The article in "Le Temps" includes Uzbek authorities' speculation about the whereabouts of a key figure in the case.
Specifically, it accuses Akhmedov's subsidiary, Uzdunrobita, of concocting an unspecified hoax worth 24.4 billion Uzbek soms (around $12.5 million). It also accuses Akhmedov of failing to pay a staggering 1.2 trillion soms in taxes into the national budget and of carrying out an "unauthorized" activity that generated a "net profit" of 543 billion soms.

It also charges that large sums of money were sent, under the guise of a monthly salary, to accounts held by Akhmedov at the Moscow Bank for Reconstruction and Development.

The letter also offers a detailed itinerary of Akhmedov's alleged travels after leaving Uzbekistan.

Citing the Uzbek Prosecutor-General's Office, the letter says Akhmedov fled Uzbekistan for Kazakhstan on June 6. From there, he reportedly traveled to Istanbul on June 9 and then moved on to Paris where the letter says he "settled financial problems with his foreign accounts."

From there, he purportedly traveled to the Armenian capital, Yerevan, before finally boarding a flight on June 19 to Moscow -- where, the letter suggests, "he probably remains today."

Embassy officials provide flight numbers for several legs of Akhmedov's alleged globe-trotting and also suggest that MTS authorities helped him travel undetected by providing him with a "green corridor" into Russia, free from scrutiny from customs or other officials.

"Investigations have shown that MTS will not help us establish the truth and is covering up for Bekhzod Akhmedov," the letter says.

Hundreds Of Millions Frozen

MTS, contacted by "Le Temps," denied any knowledge of the whereabouts of Akhmedov, whom it describes as a former employee. The company also declined comment on the allegations in the Uzbek Embassy letter.

Uzbek Embassy officials failed to answer questions from "Le Temps" regarding Akhmedov's Swiss accounts, which are at the heart of the money-laundering investigation under way in Switzerland.

The paper reports that Swiss authorities have frozen some 600 million Swiss francs ($640 million) held in various accounts.

In addition to Akhmedov, the accounts have reportedly been tied to Uzbek nationals Alisher Ergashev, Shohruh Sabirov, and Gayane Avakyan.

Ergashev and Sabirov were arrested in Geneva in late July outside Lombard Odier, the bank where several of the frozen accounts were held. Both men were executives at Coca-Cola Uzbekistan, a company formerly owned by Karimova's ex-husband.

Avakyan is the operator of Takilant, a company at the heart of a parallel investigation under way in Sweden. Swedish prosecutors are investigating whether the partially state-owned Swedish telecommunications firm TeliaSonera illegally paid $320 million into Takilant's offshore accounts in exchange for 3G licenses and access to the Uzbek market.

Bump In The Road

Both the Swiss and the Swedish investigations have raised questions about possible financial connections between the four Uzbek nationals and the presidential daughter, whose personal fortune is estimated at $500 million.

Avakyan is the director of Karimova's Dom Stilya fashion house in Tashkent and is frequently photographed with Karimova.

Property documents obtained this week in France by Swedish journalists also established an explicit link between Karimova and Ergashev -- who is also Avakyan's partner at Takilant.

"Le Temps" reported that the Swiss Attorney General's Office refused to comment on the French documents.

The paper also quoted unnamed members of Geneva's diplomatic community as saying the case was unlikely to implicate Karimova, who as Uzbekistan's permanent representative to the UN in Geneva enjoys diplomatic immunity.

Karimova, 40, is frequently mentioned as a likely successor to her father, Islam Karimov, who is considered the architect of one of the most repressive regimes in Central Asia.
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Comment Sorting
by: Aftab Kazi from: Washington DC
October 13, 2012 04:40
What not already has had been said in Western media to malign Honorable President Islam Karimov and his entire family, including Excellency Gulnara Karimova. Gulnara is a multi-talented person, who has demonstrated several interests from poetry and politics to innovative businesses. She must be respected for her achievements than being allegedly accused for one or other matter. How long the Western media will continue to blame her and the leasership pf Uzbekistan? On the one hand we claim to need Uzbekistan's cooperation in Central Asia and forthcoming withdarawl of troops from Afghanistan, on the other we continue to criticize, even when something remarkable is achieved by this nation and her leaders. This is hypocrisy on our parts.
With kind regards.

In Response

by: Frank from: London
October 14, 2012 07:05
"Gulnara is a multi-talented person"

Yes, but a jack of all trades is sometimes a master of none: Googoosha maybe her stage name but she is no Googoosh (her singing popularity didn't compare with the great Persian diva, did it?). With the amount of money she allegedly has it is not surprising she can appear multi talented and 15 years below her age in appearance, and there are doubtless many thugs willing to do her bidding, but at least I am not fooled even if you are Dr. Kazi.

Consider the following:
1. Her father is a dictator.

2. She is in the jewellery business and she has diplomatic status.

3. She gets publicity for extremely minor (in comparison to her fortune) charity work.

4. She bought No. 7 Chemin de la Prévôté, Cologny, Geneva for 18.2m euros and her sister's husband bought 1253 Vandœuvres, Cologny, Geneva for 43.5m euros,and the latter price paid implied a stratospheric performance in the Geneva real estate market by comparison with the previous purchase price paid only a few years earlier, and more to the point there has been no press comment on any such an out-of-control property market in Geneva (Lola Tilayaeva's husband overpaid?. Easy money in, no quibbles about the price?)

5. Dilution scams and grasping officials calling on any business that makes profits to ask for money are a serious problem in Uzbekistan. It is the fourth most corrupt country in the world.

6. In such a robber baron country that has no free press and which does not have democracy, there is a need to get money out to protect it from rivals getting into power and confiscating it.

7. Ambassador Purnell (or one of his employees) in the U.S. Tashkent embassy in a confidential report (exposed by Wikileaks) called Gulnara the most hated person in the country. I wonder if raising paltry amounts of money for charity while at the same time taking multimillion dollar rake-offs from every profit centre in Uzbekistan perhaps has anything to do with that assessment?

8. It is not possible to make $500m from the jewellery and fashion design business in such as short time, particularly when Gulnara supposedly had a full time job as a "diplomat". Not even Chopard or Aspreys or Mappin and Webb could make such amounts from jewellery retailing: the product is a discretionary item. Even up scale jewellers like Aspreys got into difficulties once.

9. Dealing in jewellery is probably a good way to keep the Uzbek central bank governor out of the information loop on asset transfers in and out of the country.

Dr. Kazi, I don't doubt the West needs good relations with Uzbekistan, but I think you need to get real about the nature of the leadership in Uzbekistan. It is a kleptocracy protected by censorship, a lack of democracy and a corrupt judiciary.

P.S. Some business thefts in Uzbekistan

Newmont Mining (attempted theft of its Uzbek gold mining subsidiary and subsequent below-market forced sale)

Oxus Gold (Years of "no profits" operating a "low production cost" gold mine in Uzbekistan during the greatest gold bull market of all time: Gulnara's alleged company, Zeromax, got a stake in it at a below-market price as a result of a bankruptcy threatening tax penalty that was withdrawn as soon as Zeromax completed its Oxus share purchase) (example of a dilution scam).

Metal-Tech's Uzbek subsidiary bankrupted because it refused to pay a "matching dividend" to its 50% Uzbek equity "partner" when Metal-Tech was repatriating loan interest.

MTS cell phone licence confiscation (it refused to pay certain amounts asked of it after operating a popular mobile phone service for several years in Uzbekistan). Huge equity value was transferred from it to a rival as a result. Gulnara is known to be involved in the Uzbek mobile phone business.

For more on Gulnara's business dealings see this article in L'Hebdo

"La saga des sœurs Karimova"
In Response

by: Dzhumakhon from: Toshkent
October 14, 2012 13:12
I know that in Uzbekistan, it is prohibited even to sell sunflower without Gulnara's permission. She wants to control even how Uzbeks eat their peice of bread. Gulnara was my girlfriend during our school years and she was very ugly and never washed her ears and nose at that tiime. Now money washed her and became "Googoosha".

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