FCC Proposes Fine For Truphone For Failing To Report Ownership Of Russian Conglomerate

Russian tycoon Roman Abramovich is accused of being behind the Truphone investment. (photo: instagram)

JAKARTA - The Federal Communications Commission (FCC) has proposed a fine of US$660,639 (Rp9.5 billion) for small wireless operators in Montana. According to the FCC these operators have been indirectly controlled by Russian oligarchs, since at least 2011.

The FCC voted 4-0 to fine London-based Truphone Ltd, as owner of Montana-based iSmart Mobile, for exceeding the statutory limit for ownership by foreign individuals or entities associated with FCC-issued licenses. The FCC also asked Truphone to immediately apply for a corrective transfer.

FCC Chair Jessica Rosenworcel said after Russia's invasion of Ukraine the FCC "launched an internal assessment of Russia's ownership of telecommunications interests in the United States" and said the action against Truphone was the result of that review.

Truphone has 30 days to pay the fine or file a written notice requesting the cancellation or reduction of the amount of the fine.

The FCC said that during its investigation Truphone disclosed last month that a company controlled by Russian billionaire Roman Abramovich and his children held shares in the company.

Truphone and a US attorney for the company did not immediately respond to requests for comment on Thursday, April 21. But in a statement on its website, Truphone said its board was aware of news linking Abramovich to the company.

The company confirmed Abramovich has been a minority investor in the business since 2013 through Minden Worldwide.

The company said in a statement on April 1 that "in light of recent global events, the board of directors has appointed FRP Advisory to support the company in its in-person review of its strategic options."

As quoted by Reuters, the FCC order said "it appears that Truphone's failure to report true and accurate proprietary information is appalling. As a result of Truphone's failure, control of the US public carrier was transferred to unchecked foreign entities and related individuals for more than seven years."

A spokesman for Abramovich did not immediately respond to a request for comment.

FCC Commissioner Geoffrey Starks said the company has been indirectly owned by "a small group of Russian oligarchs since at least 2011. ... With the importance of the internet and the changing national security environment facing our nation, protecting our communications networks has never been more critical than it is today. ."