Role of The
National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU)
NBU advanced $8.1 million to Odil as pre-payment for future grain deliveries.
Odil loan account was to be credited based on documents evidencing grain deliveries to Uzbekistan signed by Uzkhleboprodukt.
Guarantees for the loan amount were given to NBU by Uzkhleboprodukt and The Council of Ministers of The Republic of Uzbekistan.
Loan Agreement signed by Dr. Rustam Azimov, Chairman of the NBU.
Written instructions dated November 18, 1995 given to NBU (Attn: Dr. Azimov) from Deputy Prime-Minister of the Republic of Uzbekistan, B. Khamidov, ordering the NBU to credit Odil’s loan account against railway lists confirmed by The Council of Ministers and Odil.
Railway arrival lists and falsified Uzbek customs clearances were then given to NBU showing Romak’s grain shipments to Uzkhleboprodukt as having come from Adil to Odil.
On January 16, 1997 CS First Boston presented original shipping documents for payment to NBU. These clearly showed the grain in question as having come from Romak to Uzkhleboprodukt.
NBU credited Odil’s loan account based on the falsified, non-original documentation. Dr. Azimov’s attention was repeatedly drawn to this fact, yet he showed no interest in investigating the matter despite the NBU being in possession of the proper original documentation.
Dr. Azimov was asked about the matter on November 21, 1997 during an investment conference in New York. He responded that the NBU “was only an observer in the loan”, that Uzdon is not a state company, and that Uzdon had not even participated in the GAFTA Arbitration which ruled in Romak’s favour. None of these statements are true. Dr. Azimov’s comments were reported in Dow Jones Commodities Service Newswire on November 27, 1997.
On April 20, 1997 CS First Boston submitted to the NBU a new invoice (no. 7644) for Uzkhleboprodukt, which had guaranteed payment to Romak by Uzdon but had failed to fulfil it’s obligation. The submission to the NBU specifically stated: “in case of refusal, do not deliver the documents.” On April 28, 1997 the NBU sent a response to CS First Boston by telex stating the following: “PLS BE INFORMED THE CLIENT STATE SHARE-HOLDING CORPORATION UZKLEBOPRODUCT IT IS NOT OUR CLIENT. THE CLIENT HAS ACCOUNT WITH GALA BANK, TASHKENT. WE ARE AWITING YOUR SOONEST INSTRUCTION NOW WE HELD THE DOCUMENTS FOR YOUR RISK AND RESPONSIBILITY.” On the same day, April 28, 1997 Uzdon’s lawyers in London sent Romak a fax which began: “We have been passed a copy of invoice number 7644 made out to Uzkhleboprodukt . . . . . .” It is clear from this sequence of events that the NBU deliberately attempted to mislead CS First Boston and acted against their explicit instructions.
Loan Agreement No. 95/14 dated October 2, 1995 between National Bank of Uzbekistan, Uzkhleboprodukt (Uzdonmakhsulot), Odil, and Galla-Bank
Instructions from the Deputy Prime Minister of Uzbekistan to the National Bank Chairman
Sample falsified Customs Declarations
Comments of National Bank Chairman, Dr. Rustam Azimov
Dow Jones Commodities Service Newswire story of November 27, 1997