Uzbekistan court pulls licence of Russian MTS mobile

A court in Uzbekistan on Monday cancelled all operating licences of a subsidiary of the Russian cell phone operator MTS after presenting the company with a massive new tax claim, it said.

A Tashkent court backed a request from the Uzbek Agency for Communications and Information, a state regulator, to cancel operating licences owned by the Moscow-based company’s local subsidiary Uzdunrobita, MTS said.

Last week, the government regulator filed a lawsuit against Uzdunrobita to force the company to withdraw its licenses, complaining that Uzdunrobita was still operating even though its licenses had been suspended owing to a controversial tax case.

The local MTS operator, which has been hit with a $900 million tax bill, said it would appeal Monday’s ruling within 10 days.

The company, which has denounced the case as illegal “pressure on a Russian investor,” argues that the Uzbek government agency signed the licence agreement with Uzdunrobita in 2004 and that it covered all of the company’s branches.

On July 30, Uzdunrobita had its licence suspended for three months by the same court, which ruled that the telecoms operator had committed systematic gross violations and failed to meet the government agency’s requirements.

An initial 10-day licence suspension in mid-July left nearly 9.5 million Uzbek clients unexpectedly without a cell phone connection.

The Uzbekistan prosecutor-general’s office has opened a criminal investigation into members of Uzdunrobita’s management for numerous legal violations and several of them have been arrested.

Uzdunrobita was established in 1991, and in 2004 became part of the Russian Mobile Telesystems (MTS) with 9.5 million subscribers by the end of last year.