US embassy cable - 05TASHKENT284

C O N F I D E N T I A L TASHKENT 000284 
 
 
DEPT FOR EUR/CACEN AND EUR/ACE 
 
E.O. 12958: DECL: 01/28/15 
TAGS: ECON PREL PINR UZ 
SUBJECT: GULNORA INC. STRIKES AGAIN 
 
REFS: A) 04 TASHKENT 3390 B) 04 TASHKENT 2574 and previous 
 
CLASSIFIED BY AMB. JON R. PURNELL, FOR REASONS 1.4 (B, D) 
 
1. (C) Summary: According to various reports from industry 
insiders, Gulnora Karimova, the President's daughter, is 
interested in taking over a new cellular company with U.S. 
investment, as well as Uzbektelekom, the monopoly state- 
owned telecommunications company.  She also reportedly has 
agreed with local mafia boss, Gafur Rakhimov, to take over 
his share of Zeromax in return for not interfering in his 
other businesses.  In an ironic twist, if this comes to 
pass, it would leave Gulnora in control of Coca-Cola - her 
ex-husband's former company. End summary. 
 
2. (C) According to various reports, since first daughter 
Gulnora Karimova returned to Uzbekistan several months ago, 
she has been venturing out into new investments, mostly via 
several Russian companies.  For example, Amcit business 
sources have told us that Karimova may be behind recent 
moves to push U.S. investment company Telecom Inc. out of 
the Uzbek market.  Telecom Inc. invested USD 12 million in a 
cellular telephone company called Skytel.  Skytel uses CDMA 
450 frequency, which is new technology for the Uzbek market. 
According to the Amcit leading the venture, after several 
months in operation, Gulnora Karimova directly approached 
them about taking over some portion of the company.  The 
Amcit claimed that because the company did not respond to 
her requests, the company's frequency has been jammed by an 
Uzbek Government agency, making the cellular service nearly 
inoperable.  According to this source, Telecom Inc.'s Uzbek 
partner, state-owned Uzbektelekom, is either unwilling or 
unable to help and has chosen to not return the U.S. 
company's phone calls. 
 
3. (C) It appears that Gulnora would have been able to 
invest in Skytel, regardless of Telecom Inc.'s response to 
her query.  Several sources, including the GOU's Commerzbank 
consultant working on the Uzbektelekom privatization, 
Torsten Erdmann, claim that Gulnora is positioning herself 
to take over Uzbektelekom.  Recent legislative changes and 
revisions of the company's privatization deal, lead post to 
believe that there is an influential local investor vying 
for company leadership (Ref A).  According to Erdmann, only 
an investor with a close relationship to Uzbek Government 
officials could convince them to make such a controversial 
change to legislation, basically guaranteeing colossal 
returns to the company's owner and imposing losses on other 
firms.  The new legislative changes dictate that all 
international telecommunication networks must go through 
Uzbektelekom, giving them monopoly control of all services, 
including Internet and IP-telephony.  All indications point 
to Gulnora as this investor. 
 
BACK TO THE BASICS 
------------------ 
 
4. (C) Aside from her interests in the telecommunications 
industry, Emboff also heard from an Amcit involved in the 
oil and gas industry that Gulnora struck a deal with local 
Mafia boss Gafur Rakhimov to take over his share of Zeromax. 
Reportedly, she promised not to interfere in his other 
businesses if he turned over his shares in Zeromax. 
According to several sources, Zeromax's largest revenue 
stream comes from organizing and transporting crude oil from 
Kazakhstan for delivery to Uzbekneftegaz, something post 
believed Gulnora to have been involved in for several years. 
Although Zeromax focuses largely on the oil and gas 
industry, the company recently acquired a majority share of 
Coca-Cola Bottlers Uzbekistan, through another company 
called Muzimpex.  Gulnora's ex-husband Mansur Maqsudi was 
one of the controlling partners in Coca-Cola before the 
divorce. (Ref B) 
 
COMMENT 
------- 
 
5. (C) It would be an ironic twist that after serious GOU 
efforts to thwart Maqsudi's influence with Coca-Cola 
following the Karimova-Maqsudi divorce, she winds up 
controlling the company. 
 
PURNELL