The Department for Combating Economic Crimes under the General Prosecutor's Office of Uzbekistan has uncovered the embezzlement of 643.2 billion soums ($53.9 million) in budget funds, the department's press service reported.
The pre-investigation check was conducted jointly with the Compliance and Anti-Corruption Department of the Tax Committee. According to the department, officials from the Tax Committee, the Bukhara Regional Tax Administration, the state company Uzbekneftegaz, LLC Sh.G., LLC S.E., LLC A., and the permanent establishment of LLC E.E. in Uzbekistan colluded.
The investigation found that, despite being exempt from VAT, they illegally included VAT amounts in electronic invoices for services worth 5.3 trillion soums provided under the project to expand the production capacity of the Shurtan Gas Chemical Complex. As a result, an unjustified VAT amount was generated in the budget. According to the department, these funds were returned to the account of LLC A. and also directed to pay off the creditor debt of LLC S.E. to the state.
Thus, 643.2 billion soums in budget funds were stolen through embezzlement or misappropriation. A criminal case has been initiated under Article 167 of the Criminal Code (Embezzlement or Misappropriation). Investigative actions are currently underway.
Earlier, President Shavkat Mirziyoyev announced a large-scale inspection of Uzbekneftegaz and the State Assets Management Agency, during which, he said, 'billions of soums in thefts' were uncovered. Media reported the arrest of former Uzbekneftegaz head Bakhodir Siddikov.
At a meeting on January 27, the head of state stated that 'corruption had flourished for many years' in these structures and instructed the State Security Service to consider the responsibility of employees who oversaw the activities of Uzbekneftegaz and the agency. The president also demanded a thorough check of every case of state property sales, exposure of corruption schemes, and ensuring the inevitability of punishment.
The project to expand the capacity of the Shurtan Gas Chemical Complex was approved by a presidential decree in 2017. It aimed to increase polyethylene production from 125,000 to 405,000 tons per year through deep processing of synthetic naphtha produced at the Uzbekistan GTL plant and to launch polypropylene production with a capacity of up to 100,000 tons.
In December 2021, after the GTL plant was launched, the president initiated the construction of a new complex to triple the capacity of the Shurtan Gas Chemical Complex. The project cost was estimated at $1.84 billion, of which $629 million was to come from Uzbekneftegaz's own funds and $1.21 billion from foreign loans.
In 2023, Gazeta reported that the technological equipment of the future complex was proposed to be moved to the Karakul district of Bukhara region for integration with the Saneg project—the MTO gas chemical complex. In this case, Uzbekneftegaz would lose control over the project, receiving a 40% stake in the joint venture Ark Chemical, while Saneg's stake would be 60%. The general contractor of the MTO gas chemical complex was Enter Engineering.
Former chairman of Uzbekneftegaz, Mehriddin Abdullayev, opposed this initiative and the relocation of the project to Bukhara region, but the project was nevertheless implemented.
In 2023, the Competition Development Committee opened a case against Saneg Enera and imposed a fine of 1,000 times the base calculation value for violating Article 26 of the Law 'On Competition'. The basis was the company's purchase of a stake in the authorized fund of Ark Chemical without the committee's consent.
It is worth noting that Saneg Enera, Enter Engineering, Eriell, and other companies belong to entrepreneur Bakhtiyor Fazilov. Earlier, it was reported that the government plans to sell assets of Enter Engineering, Eriell, and Saneg to cover wage arrears (about $131 million), as well as obligations to the budget and banks. New investors are expected to be attracted to major projects such as the MTO Gas Chemical Complex, Bukhara Airport, Tebinbulak, and the Fergana Oil Refinery.
Source: www.gazeta.uz