Uzbek courts recognise MTS subsidiary branches bankrupt

Business Materials 12 June 2013 14:44 (UTC +04:00)

Uzbekistan, Tashkent, June 12 / Trend corr. Trend D.Azizov /

The Economic Court of the Republic of Karakalpakstan and Regional Economic Courts of Uzbekistan recognised the bankruptcy of the branches of FE Uzdunrobita LLC (a subsidiary of MTS JSC in Uzbekistan) during recent sessions, the reports of the courts published in the local media on Tuesday said.

According to reports, liquidation proceedings are being opened for all 12 branches of Uzdunrobita and liquidation mangers are appointed.

Officially branches of Uzdunrobita had the status of a judicial person, but alongside with this, they were included into the structure of the main company.

As was previously reported, last summer Uzbekistan's Agency for Communications and Information (UzACI) accused the company that its subsidiaries had worked without obtaining separate licenses and withdrew Uzdunrobita's licence.

Alongside with this, UzACI, being a shareholder of Uzdunrobita till 2002, was applying the branch structure of the company and was actually supporting the possibility of using this structure when issuing licenses to the operator.

In late April, the Economic Court, made a decision on Uzdunrobita's request on the recognition of its bankruptcy, and opening liquidation proceedings granting the request of creditors.

In late May, a meeting of the creditors made decision on setting up the company's property for auction at a starting price of 600 billion soums.

In June of last year the regulatory authorities of Uzbekistan started inspections of Uzdunrobita which is the largest mobile operator in Uzbekistan.

The Attorney General's office of Uzbekistan sanctioned the seizure of the original documents and property inventory and several arrests of employees were carried out.

At the request of the State Inspection of Communication, MTS turned off its networks throughout the whole territory of Uzbekistan in July.

In August of the last year the Economic Court of Tashkent supported the statement of the Uzbek Agency for Communications and Informatization on the withdrawal of all licenses from Uzdunrobita.

In September, Tashkent City Criminal Court gave its verdict against four managers of Uzdunrobita and sentenced them to fines and to different terms of correctional labour and made a decision on the transfer of the entire property of Uzdunrobita into the state income.

In November the board of appeals of the Tashkent City Criminal Court reversed the decision of the lower court on transferring the company's property to the state and determined the amount of financial claims to Uzdunrobita to the amount of 600 million dollars with the possibility of paying this amount in instalments over a period of eight months.

The board also removed the arrest of company's property imposed by a court in the first instance. The verdict of the first instance in relation to the managers was upheld.

The total amount of the claims from the General Prosecutor's Office, antimonopoly authorities, Uzbek Agency for Communications and Informatization and tax authorities against the company are more than one billion dollars which is equivalent to the amount of MTS investments put into the development business in Uzbekistan.

The official exchange rate on June 12 is 2088.09 sum / $1.