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Viewing cable 05TASHKENT284, GULNORA INC. STRIKES AGAIN

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Reference ID Created Released Classification Origin
05TASHKENT284 2005-01-28 13:01 2010-12-12 21:09 CONFIDENTIAL Embassy Tashkent
P 281333Z JAN 05
FM AMEMBASSY TASHKENT
TO SECSTATE WASHDC PRIORITY 1819
INFO AMEMBASSY ALMATY 
AMEMBASSY ASHGABAT 
AMEMBASSY BISHKEK 
AMEMBASSY DUSHANBE
C O N F I D E N T I A L TASHKENT 000284 

DEPT FOR EUR/CACEN AND EUR/ACE 

EO 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, XXXXXXXXXXXX, to take over his share of ZeromaxXXXXXXXXXXXX. 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, XXXXXXXXXXXX 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 XXXXXXXXXXXX, after several months in operation, Gulnora Karimova directly approached them about taking over some portion of the company. The XXXXXXXXXXXX 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 XXXXXXXXXXXX, 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 XXXXXXXXXXXX, 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
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4. (C) Aside from her interests in the telecommunications industry, Emboff also heard from XXXXXXXXXXXX that Gulnora struck a deal with local Mafia boss XXXXXXXXXXXX to take over his share of Zeromax. XXXXXXXXXXXX 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. XXXXXXXXXXXX(Ref B)

COMMENT
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PURNELL