UPDATE 1-MTS says Uzbek unit assets confiscated by court

Mon Sep 17, 2012 8:31pm IST

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* Some MTS staff get corrective labour sentences

* Ruling follows $1.1 billion write-off

* Tashkent court confirms case has ended

MOSCOW, Sept 17 (Reuters) - Russia's top mobile phone operator MTS said on Monday that the Tashkent Criminal Court ordered the confiscation of all assets owned by its Uzbek subsidiary Uzdunrobita in a criminal case against its local staff.

The court also sentenced four Uzdunrobita's managers to nearly 2.5 years of "corrective" labour with a further three-year ban on returning to business, said a spokeswoman for MTS.

"MTS disagrees with the unfair sentence on the four Uzdunrobita employees... MTS reserves the right to use all legal means, first of all on the international level, to recover the damages ... it incurred as a result of illegal actions against its Uzbek subsidiary," the company said in a statement.

The mobile operator's New York-listed stock fell 2.7 percent to $18.66, with closest peer Vimpelcom down less than half a percent.

MTS, part of oil-to-telecoms conglomerate Sistema , said it was not allowed to represent the interests of its staff in the process it claims is an "unwarranted attack" on its business.

The company last month took a $1.1 billion write-off after the Uzbek court revoked its local operating licence and said the authorities had initiated enforcement proceedings to seize Uzdunrobita's assets.

Contacted by Reuters, the Tashkent Criminal Court confirmed it had finalised the case of Uzdunrobita but declined to give any details.

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