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MTS regains control of Uzbek operations

Following a successful appeal, the Uzkbek government must relinquish control of local operator Uzdonrobita to its owner, Russian firm MTS. The Appeal College of the Tashkent Criminal Court overturned a previous ruling which allowed the state to wrest control of the Uzbek operator.

Commenting on the announcement, MTS CEO Andrei Dubovskov stated: "We are contented that the MTS arguments during the court processes were heard and partly satisfied.” Dubovskov’s enthusiasm was likely tempered by the US$600 million fine for tax evasion that MTS has been issued; in addition, the prison sentences of four Uzdonrobita managers have been upheld.

In July this year the Uzbek government accused MTS of evading taxes and violating the terms of its licence, which was subsequently suspended. The operator has since been unable to provide coverage to its 9.5 million customers. MTS has dismissed the allegations as “blatant harassment by Uzbek government authorities with the thinly-veiled purpose of destroying the business and expropriating its assets."

While the holding will now be returned to MTS, it may not be able to continue operations, having incurred an impairment loss of US$1 billion on its Q2 results due to July’s ruling.

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