Commercial Activities of Public Officials and Majoritarian MPs from Samegrelo Municipalities

01 March, 2017

“Law of Georgia on Conflict of Interests and Corruption in Public Service” determines a list of officials, who are obliged to fill in and present a property declaration within two months after the appointment.

Failure to submit a declaration and/or submission of an incomplete one, not fully disclosing the property and economic interests of public officials as well as their family members, is considered as a violation of the law. Meantime, it poses the threat of corruption.

Transparency International - Georgia explored the property declarations of the officials from Samegrelo municipalities as well as MPs elected in the Parliament from the given region; below we present information on the officials who have not fully disclosed information about the commercial activities and the property owned by them or their family members.

Following the study, we have made the following findings:

  • Some of the officials are not disclosing complete information on their property status;
  • In certain cases, public officials do not include information on their own and/or their family members’ involvement in commercial activities;
  • Out of eight officials presented in the survey, seven officials have not disclosed information  on their own and/or their family members’ involvement in commercial activities;
  • There is inaccuracy detected in the declaration of Irakli Khakhubia, Majoritarian MP of Poti.

Irakli Khakhubia – Poti Majoritarian MP

Irakli Khakhubia has not fully disclosed his business interests in the declaration submitted on 31 December 2016, in particular: 

  • He holds 25% share in “Iceberg 2” ltd. (code: 215127725), which is currently managed by Irakli Vekua (ID- 42001002848) – “Iceberg 2” ltd holds a fishing license in Black Sea (license numbers - 1000007 and 1000011);
  • Irakli Khakhubia holds 18% share in “Geo Capital Management” ltd. (tax code - 401952428), which he has not declared. The Charter of “Geo Capital Management” does not specify the company’s field of activity;
  • Irakli Khakhubia has not declared either his 18% share ownership in “Gcm Service” ltd. (tax code - 401952437). The Charter of “Gcm Service” does not specify the company’s field of activity;
  • Irakli Khakhubia has declared that he holds 30% share in “betwin” ltd (tax code - 415085277). Activities of the given company are rather diverse, including customs brokerage service, freight declaration, construction works, expeditionary activities, service with all types of vehicle,  freight shipment, extraction of inert materials and etc.  
  • The companies owned by Irakli Khakhubia - “Geo Capital Management” ltd, “Gcm Service-” and “betwin” ltd – have not taken part in any state procurement.

In his declaration, Irakli Khakhubia notes that he has generated income of GEL 150,000 from entrepreneurial activities; in the relevant field of the declaration, “Irakli Khakhubia” is indicated as the name of the enterprise. However, no entity of the given name could found in the database of Public Register. Presumably, Irakli Khakhubia has committed a mistake while filling in the property declaration, while the Civil Service Bureau has not duly verified the data.

Edisher ToloraiaMember of Parliament, Zugdidi Majoritarian MP

Edisher Toloraia, who was Gamgebeli of Zugdidi Municipality when filling the last declaration  in March of 2016, has not indicated that his family members own shares in the following businesses:

  • Spouse – Maka Ghurtskaia; from 2011, she is holding 100 % of stock in “Tbili Kera 2011” (tax code - 419983389). According to the Charter of “Tbili Kera 2011” ltd, the company operates in the following fields: trade, service, production, agriculture, construction and etc.  
  • His sister, Ekaterine Toloraia holds 50% of stock in “Orte” ltd. (tax code - 419983799); “Orte” performs activities in the following fields:  marketing, retail and wholesale trade, export and import of goods, agriculture, food industry, printing industry and so on.
  • “Tbili Kera 2011” and “Orte” have not taken part in state procurement.

Lasha Gogia - Gamgebeli of Zugdidi Municipality

In his declaration  filled in September 2016, Lasha Gogia indicates that he owns 100% of “MedHouse” ltd. Meantime, he has not declared that his father Almer Gogia is a director of the given company (tax code: 419984057). There is no specific field of activity defined for “Medhouse”; the company has not taken part in any state procurement;

Gia Kutsia - Deputy Gamgebeli of Abasha Municipality

In his declaration  filled in October 2016, Gia Kutsia has not indicated that his spouse Nino Pkhakadze is one of the founders  of collective responsibility society “Dagmara Tsanava 95” (tax code - 222430876), which has not taken part in any state procurement.

Giorgi GoroziaDeputy Gamgebeli of Martvili Municipality

In his declaration filled in October 2016, Giorgi Gorozia has not indicated that he owns 100% of “G.P.G” ltd. (tax code- 435428315). “G.P.G” performs a wide range of commercial activities, export and import of goods. The company has not taken part in any state procurement.  

Irakli Kakulia - Mayor of Poti

In his declaration filled in April 2016, Irakli Kakulia has not indicated that his father, Guram Kakulia  possessed non-agricultural plot of land with area of 785 m2 (cadastral code - along with constructed buildings. Guram Kakulia also owns 601 m2 plot of land (code - in Poti, along the left bank of river Rioni, Nabada bed.

Severiane Shengelia - Chairman of Spatial-Territorial Planning and Infrastructure Commission at Poti Sakrebulo

Severiane Shengelia filled the declaration in September 2016.  As he indicated, he is a founder of “GS Magdusi” (tax code 415080977). Though, he has not declared that he owns 100% of its stock and he is a director at „G S“ ltd. (tax code 415083787), which violates the effective law. “GS” ltd is engaged in transportation and trade services.

Temur GhvinjiliaChairman of Tsalenjikha Municipality Sakrebulo

Temur Ghvinjilia, who filled in his last declaration in September 2016, has not disclosed that he owns 30% in   “Sheli” ltd (tax code - 442728274) and 20% in “Tsalenjikha Roads” (tax code - 442728522). Temur Ghvinjilia had the given information included in 2014 and 2015 declarations. Both companies operated in the following fields:  construction and repair works, trade, road construction, agriculture and etc.

The companies owned by Temur Ghvinjilia have not won any state procurement since 2012; as for the previous procurements, you can find details in the report of TI Georgia published in 2015.

Filling of declarations by officials is an important lever for ensuring transparency and accountability. Therefore, due completion of declarations by officials is an essential factor. Incomplete filling of declarations poses a threat of corruption.

In addition, in case of breaching the requirements of the law, the legislation should envisage adequate sanctions. Despite the obvious breach of law, the Georgian legislation does set out effective tools for responding to similar cases. Neither the Civil Service Bureau nor any other agency is required to verify the property declarations filled in by officials, to adjust them if necessary or impose sanctions. We’ve been repeatedly  bringing the given problem to the fore, highlighting the need for eliminating existing legal flaws.