Saturday 25th January 2014,

Coca-Cola Uzbek managers arrested for fraud

Reporters365 January 23, 2014 No Comments

 Two top managers from Coca-Cola’s Uzbek joint venture have been arrested and face fraud charges, a source in Tashkent city prosecutor’s office told AFP on Thursday.
“Two top managers of the company were arrested in late December last year and charged with trade violations and forgery,” the source, who wished not to be named, told AFP.
Coca-Cola opened a joint venture called Coca-Cola Ichimligi Uzbekiston Ltd in Uzbekistan in 1993. Currently the American soft drinks maker holds a 42.9 percent share, while a 57.1 percent controlling stake belongs to a company called Muzimpex.
A preliminary investigation found massive financial irregularities at Coca-Cola Ichimligi Uzbekiston, the source at the prosecutor’s office said.
Between 2010 and 2013, the joint venture managers are accused of falsifying company accounts to the tune of $9 million, and faking customs declarations for sugar deliveries worth $4.6 million, the source said.
They are also suspected of embezzling $12 million in cash from the company.
Coca-Cola’s Tashkent office could not be reached for comment.
Coca-Cola has a troubled history in Uzbekistan, connected to President Islam Karimov’s eldest daughter, Gulnara Karimova.
Gulnara’s former husband Mansur Maqsudi, an American of Afghan descent, owned a trading company that initially brought Coca-Cola into Uzbekistan.
He then partly owned the joint venture, but his shares were confiscated and taken over by Musimpex in the period following his acrimonious divorce from Gulnara.
Later Maqsudi accused Coca-Cola of conspiring with the Uzbek business elite to seize his majority share in the joint venture.
Critics of Gulnara allege that the Coca-Cola joint venture, under its current management, was connected to her business empire. She denied the allegation on Twitter and in recent interviews to Western media.
Gulnara, who long managed to combine politics with a career as a pop star, fashion designer and head of charitable foundations has suffered a spectacular fall from power in recent months.
In October last year her media empire was shut down by the authorities, and more than a dozen boutiques selling Western clothes in Tashkent that are believed to belong to her or her business partners were closed on allegations of tax evasion and other offences.

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