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Oct 23, 2024

Uzbek Businessman Disillusioned By Mirziyoev's Promises Of Reforms

Saidikrom Ahrorov says corruption in Uzbekistan’s business sphere is even worse now than during the Karimov era. A wealthy entrepreneur who pioneered production at Uzbekistan’s first syringe factory

Saidikrom Ahrorov says corruption in Uzbekistan’s business sphere is even worse now than during the Karimov era.

A wealthy entrepreneur who pioneered production at Uzbekistan’s first syringe factory has slammed what he describes as widespread corruption in the country and believes President Shavkat Mirzioyev’s promises of reforms have failed to materialize.

Saidikrom Ahrorov -- who was in charge of constructing and operating the Mediz syringe plant in the 1990s -- claims he recently fell victim to large-scale financial fraud as he worked to restart the old factory and turned it into a profitable business.Ahrorov, 78, returned to Uzbekistan from self-exile after Mirziyoev came to power in 2016, promising to open up the Central Asian country that was stagnant and isolated under his strongman predecessor, Islam Karimov.Ahrorov’s path in Uzbekistan’s business sphere began in the late 1980s when he was tasked by the former Soviet Uzbek government to build a single-use syringe factory.A medical engineer by profession, Ahrorov at the time served as the deputy head of UzMedTekhnika, a state agency in charge of providing medical equipment.Tashkent allocated $16 million for the project and gave Ahrorov just one year to build the facility from scratch, he told RFE/RL.Ahrorov recalls bringing investors and specialists from Spain who helped to construct the Mediz plant, which officially opened in 1991 as Uzbekistan became an independent country.Mediz was soon privatized and Ahrorov became the plant’s director and acquired 40 percent of its shares. It’s not known under what circumstances the factory, which was built with state money, had been privatized and how Ahrorov became a major shareholder.The factory initially produced about 100 million syringes annually, and its production capacity rose to 250 million at its peak by the early 2000s, according to Ahrorov, making Mediz a multimillion-dollar business.But Ahrorov’s successes came to an abrupt end in 2003 when his son divorced his wife, Lola, who happened to be the youngest daughter of powerful former President Islam Karimov.“I then came under pressure,” Ahrorov said. “It was like I had to choose between my life and the [business].”Ahrorov and his family left Uzbekistan, first settling in Spain before moving to the United Arab Emirates, where he entered the real estate business.Second Chance With Syringe PlantAhrorov visited his old syringe factory after his return to Uzbekistan after the regime change in 2016.“The plant’s operation had been suspended. It was an abandoned place, like a museum; its floors had collapsed,” Ahrorov said in describing the state of the vast, once-vibrant compound in Tashkent Province’s Qibray district.Ahrorov said he was keen on helping to revive the dilapidated factory and that the plant’s new owner, the Arjun Investment joint-stock company, told him to look for investors.As Ahrorov was planning the business strategy, the factory changed hands.According to documents obtained by RFE/RL, the factory was acquired by the newly established MedPharm Co. in 2019. MedPharm was founded by Turkiston Bank, a private joint-stock commercial bank.“In June 2020, the head of the Turkistan Bank, Sherzod Muhiddinov, and his aide Sardor Yunusov visited me at my home,” Ahrorov told RFE/RL. “They said: ‘The bank bought the factory, but it is not operational. Would you be willing to help rebuild the plant?’”Ahrorov said he agreed and pledged to resurrect the old business and brand in six months, hiring a team of highly skilled professionals.“Working day and night, we managed to restore it in four months,” Ahrorov said.

The Med Invest disposable syringe factory

Once again, the factory -- now renamed Med Invest -- became a profitable business, according to Ahrorov. Demand for single-use syringes skyrocketed as the COVID-19 pandemic unfolded in 2020.As the factory operated in three shifts to keep up with the increasing demand, Ahrorov decided it was time to modernize its equipment -- to replace the machines left from the 1990s.After receiving approval from the Economy Ministry and other state agencies, Ahrorov applied for a loan from Turkiston Bank to purchase new equipment for the factory. But Turkiston Bank rejected his request.Victim Of Fraud?Ahrorov said he was shocked to find out from the General-Prosecutor’s Office that the Med Invest factory had already been used as collateral by MedPharm and three other companies that borrowed money from the Turkiston Bank in 2022 and failed to repay their debt.The prosecutors identified the three companies as Central Flour, Raffles Place, and Best Trend Doors. Ahrorov claims he had never heard of the three firms and does not understand how they managed to use the factory he’s been running as a guarantee to secure large loans.According to documents presented by the prosecutors, MedPharm and Best Trend Doors borrowed nearly $3.1 million and $3.9 million, respectively. The amount of the loans obtained by Central Flour and Raffles Place is unknown.Both Turkiston Bank and MedPharm were declared bankrupt, and prosecutors began to seize the Med Invest factory’s assets, including its vehicles.In January, the Med Invest disposable syringe factory closed down for the second time.

Mirziyoev has repeatedly urged Uzbek professionals living abroad to return home and help him reform Uzbekistan.

RFE/RL contacted the Prosecutor-General’s Office and the Central Bank for comment but did not receive a reply.No one has been held responsible for the apparent financial fraud. Ahrorov says prosecutors “helped” the fraudulent companies instead of prosecuting them.Mirziyoev has repeatedly urged Uzbek professionals and businessmen living abroad to return home and help him reform and build up Uzbekistan.But Ahrorov says the country has failed to follow through with Mirziyoev’s promises of reform and that “theft” and corruption in the business sphere has become much worse than during the Karimov era.“Corruption obviously did exist in 2003 [when I left the country], but it wasn’t to the extent that we’re witnessing today,” Ahrorov said. “People were afraid back then because they would end up in prison for illegally getting [massive] loans from the bank. Now they are not afraid -- they’re committing such crimes and getting away with it."