Uzbekistan nationalizes business from Russia's WBD

© RIA Novosti . Alexey Kudenko / Go to the mediabankMarina Kagan, a member of WBD's Management Board
Marina Kagan, a member of WBD's Management Board - Sputnik International
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Uzbekistan has de facto nationalized the local branch of Russia's largest dairy manufacturer, Wimm-Bill-Dann (WBD), "in profit of state," Kommersant said on Tuesday, following the company's conflict with the powerful Uzbek National Security Service.

MOSCOW, September 21 (RIA Novosti) - Uzbekistan has de facto nationalized the local branch of Russia's largest dairy manufacturer, Wimm-Bill-Dann (WBD), "in profit of state," Kommersant business daily said on Tuesday, following the company's conflict with the powerful Uzbek National Security Service.

"In fact, they took away our business," Marina Kagan, a member of WBD's Management Board, was quoted by Kommersant as saying after Monday's decision by a Tashkent city court to transfer WBD's property in Tashkent to the Uzbekistan state. "We intend to file an appeal to Uzbekistan's highest court."

Kagan said it was not a serious loss for the company, adding that WBD had invested $5 million in its Uzbekistan business.

A source familiar with the situation told Kommersant the decision was due to a conflict between WBD and the country's National Security Service, which controls all large businesses in the country including foreign investment, as well as its role in combating dissent and insurgency. Uzbekistan's Interior Ministry declined to comment.

WBD launched its business in Uzbekistan in 2004 after buying 77 percent of local company Toshkentsut for $131,400. In 2005, the Uzbekistan authorities offered it tax privileges, which were to last until 2011. But problems for WBD began in 2009, when the tax authorities started checks on the firm.

Three months ago, a Tashkent court opened a criminal trial against WBD Tashkent's management, including former Chief Executive Officer Alexandra Usova. WBD management was accused of creating organized criminal groups, breaking tax and budget legislation and embezzlement.

Kommersant quoted a source at the Russian Foreign Affairs Ministry saying Russian President Dmitry Medvedev and Uzbekistan's President Islam Karimov had discussed the matter during a phone conversation, with Karimov maintaining a tough stance on the issue.

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