Pepsi-sevar
08-22-2001, 12:35 PM
Life Tasted Good for Coke Bottler in Tashkent
Until He Separated From President's Daughter
By STEVE LEVINE and BETSY MCKAY
Staff Reporters of THE WALL STREET JOURNAL
When the cola wars came to Uzbekistan in the mid-1990s, Coca-Cola Co.
emerged
the big winner. Many Uzbeks and foreigners concluded that the reason was
a
not-so-secret weapon: a partnership with the son-in-law of President
Islam
Karimov.
But last month, the president's 29-year-old daughter, Gulnora
Karimova-Maqsudi, separated from her husband, Mansur Maqsudi, 34,
president
of Coke's local bottling company. And since then, the cola giant's
fortunes
in Uzbekistan have abruptly changed.
Broad Investigation
Tax inspectors, fire inspectors, customs inspectors, and even an
antinarcotics official, have descended on Coke's main bottling plant in
the
Uzbek capital of Tashkent. A week ago, authorities detained the bottling
company's local general manager for 24 hours, while investigators tore
through his office and that of the manager of the Maqsudi family's
trading
company in Tashkent, according to officials with the two companies.
Government investigators have taken away piles of documents from the
companies and questioned about 10 current and former employees of the
bottling concern, company officials said. The authorities also have
temporarily detained some local Coke truck drivers and verbally harassed
some
merchants selling the soft drink, bottling company officials added. The
Tashkent offices of Coca-Cola itself, a separate entity from the
bottler,
have been undisturbed.
Coke officials at the company's Atlanta headquarters are trying to be
diplomatic, stressing their desire to cooperate with the sudden,
sweeping
investigation. It remains to be seen whether the Uzbek government comes
up
with evidence of wrongdoing, but the Maqsudi family has already
concluded
that something else is driving the government's behavior.
'Powerful' Woman
"You have a powerful [woman] who, rather than following traditional
divorce
proceedings in court, is exerting her power in government," said
Patrizia
Zita, a family friend and New Jersey public-relations executive to whom
the
Maqsudis have referred all questions.
Mansur Maqsudi, who lives in New Jersey, where his family's trading
company
has an office, declined to comment. Ms. Karimova-Maqsudi, who had been
living
in New Jersey with her husband and two children until shortly before the
separation, couldn't be reached for comment.
Officials with the Uzbek Foreign Ministry and state news agency, which
serves
as the official conduit for all press inquiries, didn't respond to more
than
a dozen requests for comment on the government investigation and the
status
of the Maqsudi-Karimova marriage. In private conversations with foreign
diplomats, Uzbek officials have strongly denied the investigation has
any
connection to Mr. Maqsudi's relationship with the president's daughter,
according to the diplomats.
However it is resolved, Coke's predicament illustrates the route to
success
that many local and foreign businesses have taken in the former Soviet
Union
-- a partnership with top government officials or people close to them.
And
if there is indeed a connection between the Maqsudi-Karimova separation
and
the government investigation, Coke's experience also demonstrates one
potential peril of that strategy.
Not long after the 1991 Maqsudi-Karimova marriage, Mr. Maqsudi and his
older
brother, Fareed, approached Coca-Cola, offering to bottle the company's
products in Uzbekistan. Coke at the time considered the possibility that
a
partnership with an in-law of the top Uzbek leader could be risky,
according
to a person close to the company.
But that worry was outweighed by the company's eagerness to establish
itself
in a region long known as a stronghold of rival PepsiCo Inc. With 25
million
people, Uzbekistan is the largest nation in Central Asia, although it is
poor, and its cotton- and gold-based economy has been declining. Critics
say
that President Karimov's brutal crackdown against alleged Muslim
extremists
has led to a broadened insurgency by guerrillas based in Afghanistan.
The
Maqsudis, ethnic Uzbeks who had emigrated to the U.S. from Afghanistan,
are
unusual in having both substantial capital and an intimate knowledge of
this
dicey market.
Apart from their Uzbek interests, the brothers operated a family
electronics-export company in Manhattan. After their wedding in
Tashkent,
Mansur Maqsudi and his bride had flown to a reception in New York for
their
American friends, according to the family spokeswoman, Ms. Zita.
Coke and the Maqsudis formed a joint venture in 1994, investing about
$1.7
million each. Mansur Maqsudi was named president of the new company,
Coca-Cola Bottlers Uzbekistan. Through the family-owned Roz Trading
Group
Ltd., the Maqsudis eventually acquired a controlling 55% share of the
venture, with Coke owning the rest.
cont.
Until He Separated From President's Daughter
By STEVE LEVINE and BETSY MCKAY
Staff Reporters of THE WALL STREET JOURNAL
When the cola wars came to Uzbekistan in the mid-1990s, Coca-Cola Co.
emerged
the big winner. Many Uzbeks and foreigners concluded that the reason was
a
not-so-secret weapon: a partnership with the son-in-law of President
Islam
Karimov.
But last month, the president's 29-year-old daughter, Gulnora
Karimova-Maqsudi, separated from her husband, Mansur Maqsudi, 34,
president
of Coke's local bottling company. And since then, the cola giant's
fortunes
in Uzbekistan have abruptly changed.
Broad Investigation
Tax inspectors, fire inspectors, customs inspectors, and even an
antinarcotics official, have descended on Coke's main bottling plant in
the
Uzbek capital of Tashkent. A week ago, authorities detained the bottling
company's local general manager for 24 hours, while investigators tore
through his office and that of the manager of the Maqsudi family's
trading
company in Tashkent, according to officials with the two companies.
Government investigators have taken away piles of documents from the
companies and questioned about 10 current and former employees of the
bottling concern, company officials said. The authorities also have
temporarily detained some local Coke truck drivers and verbally harassed
some
merchants selling the soft drink, bottling company officials added. The
Tashkent offices of Coca-Cola itself, a separate entity from the
bottler,
have been undisturbed.
Coke officials at the company's Atlanta headquarters are trying to be
diplomatic, stressing their desire to cooperate with the sudden,
sweeping
investigation. It remains to be seen whether the Uzbek government comes
up
with evidence of wrongdoing, but the Maqsudi family has already
concluded
that something else is driving the government's behavior.
'Powerful' Woman
"You have a powerful [woman] who, rather than following traditional
divorce
proceedings in court, is exerting her power in government," said
Patrizia
Zita, a family friend and New Jersey public-relations executive to whom
the
Maqsudis have referred all questions.
Mansur Maqsudi, who lives in New Jersey, where his family's trading
company
has an office, declined to comment. Ms. Karimova-Maqsudi, who had been
living
in New Jersey with her husband and two children until shortly before the
separation, couldn't be reached for comment.
Officials with the Uzbek Foreign Ministry and state news agency, which
serves
as the official conduit for all press inquiries, didn't respond to more
than
a dozen requests for comment on the government investigation and the
status
of the Maqsudi-Karimova marriage. In private conversations with foreign
diplomats, Uzbek officials have strongly denied the investigation has
any
connection to Mr. Maqsudi's relationship with the president's daughter,
according to the diplomats.
However it is resolved, Coke's predicament illustrates the route to
success
that many local and foreign businesses have taken in the former Soviet
Union
-- a partnership with top government officials or people close to them.
And
if there is indeed a connection between the Maqsudi-Karimova separation
and
the government investigation, Coke's experience also demonstrates one
potential peril of that strategy.
Not long after the 1991 Maqsudi-Karimova marriage, Mr. Maqsudi and his
older
brother, Fareed, approached Coca-Cola, offering to bottle the company's
products in Uzbekistan. Coke at the time considered the possibility that
a
partnership with an in-law of the top Uzbek leader could be risky,
according
to a person close to the company.
But that worry was outweighed by the company's eagerness to establish
itself
in a region long known as a stronghold of rival PepsiCo Inc. With 25
million
people, Uzbekistan is the largest nation in Central Asia, although it is
poor, and its cotton- and gold-based economy has been declining. Critics
say
that President Karimov's brutal crackdown against alleged Muslim
extremists
has led to a broadened insurgency by guerrillas based in Afghanistan.
The
Maqsudis, ethnic Uzbeks who had emigrated to the U.S. from Afghanistan,
are
unusual in having both substantial capital and an intimate knowledge of
this
dicey market.
Apart from their Uzbek interests, the brothers operated a family
electronics-export company in Manhattan. After their wedding in
Tashkent,
Mansur Maqsudi and his bride had flown to a reception in New York for
their
American friends, according to the family spokeswoman, Ms. Zita.
Coke and the Maqsudis formed a joint venture in 1994, investing about
$1.7
million each. Mansur Maqsudi was named president of the new company,
Coca-Cola Bottlers Uzbekistan. Through the family-owned Roz Trading
Group
Ltd., the Maqsudis eventually acquired a controlling 55% share of the
venture, with Coke owning the rest.
cont.