American, Dutch, Swedish and Swiss authorities have probed VimpelCom in connection with  graft allegations involving the president of Uzbekistan’s eldest daughter, Gulnara Karimova.
Court documents accessed by Bloomberg alleged Karimova provided access to the country’s telecom market in exchange for bribes.
The settlement could be the second largest penalty ever for US Foreign Corrupt Practices Act violations. Siemens AG paid the largest penalty — US$ 800 million — in 2008.
Corrupt Proceeds
This past June, the DOJ seized US$ 300 million in funds held in accounts at Bank of New York Mellon Corp. and Clearstream Banking SA. Prosecutors said the funds were proceeds of an international conspiracy to launder payments tied to the Uzbek bribery scheme.
A DOJ civil forfeiture complaint filed in New York earlier this year alleged VimpelCom and a rival company made more than US$ 500 million in corrupt payments.
In documents filed regarding the seizure obtained by Bloomberg, US prosecutors alleged corrupt business deals were made between VimpelCom and Takilant Ltd., a company registered in Gibraltar controlled by a “relative of the president of Uzbekistan.” Two of Bloomberg’s sources say that, although Karimova is not mentioned by name, she is the relative in question.
The settlement could be announced in January but proposed details have not been made public. No individual or company has been publicly charged yet.
VimpelCom has set aside US$ 900 million for potential liabilities from the investigations.
Class Action Suit
In the meantime, VimpelCom faces a class action suit on behalf of investors filed by Lieff Cabraser Heimann & Bernstein, LLP according to an announcement made by the firm yesterday.
According to that complaint, in August 2015 US authorities asked their European counterparts to seize $1 billion in assets in a probe of VimpelCom, Mobile TeleSystems PJSC and TeliaSonera AB, for allegedly paying hundreds of millions of dollars to businesses controlled by Karimova in order to secure wireless spectrum in Uzbekistan.
The complaint alleges that VimpelCom made “materially false and/or misleading statements” failing to disclose to investors that the company “had paid tens of millions of dollars to a company controlled by Gulnara Karimova” and that “the payments were unlawful bribes.”
