July 25, 2012 / 11:39 AM / 5 years ago

Russia says worried by MTS Uzbek executive detention

MOSCOW, July 25 (Reuters) - Russia’s Foreign Ministry said it has informed Uzbekistan of its concern over the detention of the acting chief executive of Russia’s top mobile firm MTS’s Uzbek subsidiary as part of a tax dispute that caused its licence suspension.

The dispute broke out in June, deepening MTS’s growing problems in central Asia after the company lost the right to work in Turkmenistan late in 2010.

The Uzbek government launched a near $1.3 million tax claim against MTS, part of oil-to-telecoms conglomerate Sistema in June, and on July 17 suspended its licence for 10 days citing “systematic violations”.

It also detained several senior managers, including Radik Dautov, acting head of MTS’ subsidiary Uzdunrobita.

Russia’s Foreign Ministry said in a statement on its web site on Wednesday it was concerned Dautov’s detention was a “severe measure”.

It added that resolving the issue would prevent a negative impact on the investment ties between the two countries.

Uzbekistan and Turkmenistan are members of a Russia-centred 11-strong block of former Soviet Union states. Russia is a key market for their gas but both have been seeking to diversify their exports away from it.

Uzbekistan contributed 3.5 percent of MTS’s 2011 revenues - some $430 million - and 4.5 percent of its operating income before depreciation and amortisation, the company said.

MTS also held 85 percent of the Turkmenistan mobile market until December 2010, when its mobile license was suspended for reasons that the company claimed “were never fully justified”. (Reporting by Maria Kiselyova; editing by Megan Davies and Elaine Hardcastle)

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