VZCZCXRO8394
RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #0512 1010933
ZNR UUUUU ZZH
R 100933Z APR 08
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0388
INFO RUCNCIS/CIS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0062
RUEHIL/AMEMBASSY ISLAMABAD 0097
RUEHBUL/AMEMBASSY KABUL 0124
RUEHNE/AMEMBASSY NEW DELHI 0070

UNCLAS DUSHANBE 000512 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON PHUM EINV TI
SUBJECT: TAJIKISTAN - CONVICTION OF PROMINENT ENTREPRENEUR 
REMINDS BUSINESS COMMUNITY OF WHO IS THE BOSS 
 
 
¶1. (SBU) On April 8, a court in Tajikistan convicted Marouf 
Orifov, the majority owner of the Orima supermarket chain, of 
tax evasion and bribery, and sentenced him to 8 years and 6 
months imprisonment.  The case is an example of the country's 
oppressive business environment, and the ruthless manner in 
which members of President Rahmon's family exert their 
influence over business owners. 
 
¶2. (U) Members of the State Committee for National Security 
arrested Orifov in August 2007, accusing him of attempting to 
bribe a State Committee officer.  Unusually for a bribery 
case, Orifov spent the initial months of his pretrial 
incarceration in a State Committee special facility.  The 
Anti-Corruption Agency took over the investigation, and 
Orifov was ultimately indicted for bribery, tax evasion, and 
forgery.  The trial began in March 2008, the forgery charges 
were dropped, and the court convicted Orifov of the remaining 
charges.  Although the public prosecutor requested a sentence 
of only four years, the court imposed 8 years and 6 months 
imprisonment and confiscation of Orifov's property (including 
his 70 percent share of the Orima chain). 
 
¶3. (U) Orifov is known as a savvy businessman who gained the 
confidence of international financial institutions.  He 
founded Orima in the mid-1990s, and by early 2007, the chain 
had 5 stores in Dushanbe and 1 in Kulyob.  Orifov and a Dutch 
minority partner secured $500,000 in financing from the 
International Finance Corporation in 2005.  Based on their 
business model and good management record, the European Bank 
for Reconstruction and Development provided an additional 
$4.6 million in financing in 2006.  The international 
community viewed Orifov as one of the few recent success 
stories in Tajikistan's deteriorating business climate. 
 
¶4. (SBU) Observers have speculated on how Orifov's fortunes 
turned.  Many believe that he ran afoul of President Rahmon's 
daughter, Tahmina Rakhmonova.  In early January 2007, Orifov 
opened a store in downtown Dushanbe, in a building owned by 
Rakhmonova.  The speculation is that Rakhmonova resorted to 
extortion, and when Orifov did not give her as much money as 
she wanted, she orchestrated his arrest.  Another version is 
that Orifov's competitors used their connections with 
Rakhmonova to bring Orifov down.  Yet another version has 
Orifov falling out of favor with security officials due to 
his connections in Uzbekistan (Orifov is an ethnic Uzbek). 
 
¶5. (SBU) Comment: While there is no consensus on the reasons 
for Orifov's fall, the prosecution has all of the hallmarks 
of a nepotism-driven prosecution.  Details about Orifov's 
arrest in August 2007 are sketchy, and the severity of the 
sentence ) more than double what the prosecutor requested - 
is an indication that the government is trying to send a very 
forceful message.  Orifov is not from Kulyob, and he was 
likely trying to curry favor with the President's "inner 
circle" by doing business with Tahmina Rakhmonova.  While 
Orifov's hands are probably not clean (in the current 
climate, there is no such thing as an honest businessman in 
Tajikistan), this prosecution is an example of how nepotism 
trumps business acumen.  The fact that Orifov could not get 
himself out of trouble shows that it is more important to be 
close to President Ramon and his family members that to run a 
successful business.  Many believe that Rakhmonova or her 
associates will take over Orima. 
Qassociates will take over Orima. 
 
¶6. (SBU) Comment continued: The prosecution also shows the 
government's surprisingly unpragmatic approach toward 
international financial assistance.  Government officials at 
all levels argue that Tajikistan needs international 
financial aid and assistance.  They were also well aware of 
the significant stake that international financial 
institutions had taken in Orifov's business.  While 
international investment is no reason to avoid prosecuting 
criminal wrongdoing, engaging in such a blatantly 
nepotism-driven prosecution in this instance does not build 
confidence among the international community that Tajikistan 
is a worthy beneficiary of assistance.  This case is another 
strong signal to investors to stay away from Tajikistan.  End 
comment. 
JACOBSON