A Russian telecommunications company agreed to pay $850 million to resolve federal bribery charges, the U.S. Securities and Exchange Commission said Wednesday.
Mobile TeleSystems PJSC bribed an Uzbek official who was a relative of the former president of Uzbekistan to win business in the country, the SEC said. The bribe enabled MTS to operate in Uzbekistan from 2004 through 2012. During that time, the company generated $2.4 billion in revenue, the agency said.The illicit payments made by MTS, which totaled at least $420 million, were funneled to front companies controlled by the Uzbek official, the SEC said. MTS concealed the payments on its books as acquisition costs, option payments, purchases of regulatory assets and charitable donations, according to the agency.
MTS, in making the bribes, violated the Foreign Corrupt Practices Act, as well as U.S. securities laws, the agency said. MTS is listed on the New York Stock Exchange.MTS entered into a deferred prosecution agreement with the U.S. Justice Department, pleaded guilty and agreed to pay an $850 million fine, according to the SEC. Prosecutors agreed to credit MTS $100 million for a fine it is paying to the SEC, the financial regulator said.
Justice Department representatives didn’t immediately return a message seeking comment.
“Obtaining a resolution of the Uzbek investigations was in the company’s best interests,” Alexey Kornya, the president and chief executive of MTS, said in a statement.
MTS agreed to retain an independent compliance monitor for at least three years, the SEC said in the release. The company said it will work with the monitor to ensure its compliance program is implemented to prevent and detect anticorruption violations.
“MTS’s commitment to adhering to the highest standards of business ethics will strengthen and protect the company’s position as a leader in all our markets of operation,” Mr. Kornya said in the statement.