December 12, 2021

Russian mobile network operator discloses investigation into transactions at Armenian subsidiary

On November 17, 2021 Mobile TeleSystems Public Joint Stock Company (MTS), the largest mobile network operator in Russia, disclosed in a Form 6-K filing with the US Securities and Exchange Commission that the SEC and US Department of Justice had requested information regarding “certain transactions” related to its subsidiary in Armenia.  MTS stated that the transactions had been identified in connection with an independent compliance monitor MTS had appointed in 2019, and that it was investigating the payments in Armenia and was unable to predict the timing or outcome of the investigation.

In March 2019, MTS resolved investigations by the SEC and DOJ into alleged violations of the U.S. Foreign Corrupt Practices by agreeing to pay $850 million in fines and penalties and to appoint an independent compliance monitor.  The government investigation concerned allegations that MTS violated the FCPA between 2004 and 2012 through the actions of MTS’s former subsidiary in Uzbekistan, Uzdunrobita LLC, and two shell companies, which transferred hundreds of millions of dollars in bribes to two former officials in the Uzbek government.  One of the officials indicted in connection with the alleged bribes was Gulnara Karimov, the daughter of the former president of Uzbekistan.  The other official was Bekhzod Akhmedov, the personal representative of Karimova and general director of Uzdunrobita, who allegedly conspired with Karimova to solicit and facilitate the corrupt payments. 

Form 6K