The Company of Viktor Japaridze’s Relatives Wins State Procurements
The company of Aleko Khvistani, Electric Installation Service LLC, receives state procurements. He is the brother-in-law of the parliamentary majority MP Viktor Japaridze. Aleko Khvstani is a donor of the ruling party and the director of Electric Installation Service LLC. His wife Maia Chelidze is a 50% shareholder in the company. The Khvistani family owns the company since 2015.
The Electric Installation Service LLC has received contracts worth 34,655,073 GEL through electronic tenders and simplified procurements since 2011. Whence, Electric Installation Service LLC won 6 tenders worth 6,549,941 GEL after Aleko Khvistani became a shareholder of the company. Subsequently, he transferred ownership of the share to his spouse and assumed the position of director.
Following the involvement of Viktor Japaridze's relatives in Electric Installation Service LLC, the company began participating in classified procurements. Although neither the final price of the classified tender nor the contract is posted on the State Procurement Agency's website, Electric Installation Service LLC has offered a total of 13,077,076 GEL as the service price.
Changes in the owners and director of Electric Installation Service LLC
The Electric Installation Service LLC was registered in 2005, the company is mainly engaged in construction and electrification activities. Initially, Levan Dadiani owned a 100% share and Nugzar Robakidze was the director of the company.
Viktor Japaridze’s brother-in-law Aleko Khvistani is associated with Electric Installation Service LLC since December 2015 – he acquired a 30% share of the LLC for free. In March 2016, Aleko Khvistani increased his share in the company to 50% and assumed the position of director. In December 2021, Khvistani transferred the 50% share to his wife Maia Chelidze. Maia Chelidze is the daughter of Iveri Chelidze, a member of the Parliament of Georgia for three convocations (1992-1995, 1995-1999 and 1999-2004).
Currently, Maya Chelidze and Bondo Omianidze own 50/50 shares of Electric Installation Service LLC, and the director is still Viktor Japaridze's brother-in-law Aleko Khvistani.
Following the involvement of Viktor Japaridze's relatives in the company, Electric Installation Service LLC began participating in classified procurements with the Ministry of Defense of Georgia and the State Security Service. It is worth noting that, according to our information, Viktor Japaridze’s son Otar Japaridze worked at the State Security Service until May 2022. Subsequently, he joined the Office of the National Security Council before returning to the State Security Service, where he is currently employed.
In 2017, Electric Installation Service LLC won two classified procurement contracts from the Ministry of Defense (GEO170000070 and GEO170000381). The State Procurement Agency’s website does not show the final price of these two tender contracts, although the price of the services offered by Electric Installation Service LLC was 2,017,789 GEL.
In 2017-2019, Electric Installation Service LLC participated in 5 classified procurements of the State Security Service (GEO170000600, GEO170000744, GEO180000391, GEO180000491, GEO190000434), in three out of five cases the company had no competitor, and twice it offered a lower amount compared to the competitor. The total value of the offered prices was 11,059,287 GEL.
It is noteworthy that, unlike the tenders of the Ministry of Defense, the status of all five tenders on the State Procurement Agency’s website is suspended at the stage: “acceptance of proposals is completed” and no further procedures are indicated. Hence, it is unknown whether the company finally received the contracts or not, although it is likely that in all five cases, the works were carried out by Electric Installation Service LLC.
Aleko Khvistani and Bondo Omianidze, the owner of a 50% share of Electric Installation Service LLC, are also large political donors, they have donated a total of 230,000 GEL:
- In 2014-2020, Aleko Khvistani donated a total of 110,000 GEL to the Georgian Dream-Democratic Georgia party.
- Bondo Omianidze donated 60,000 GEL to the presidential candidate Salome Zurabishvili in 2018, and 60,000 GEL to the Georgian Dream party in 2020.
Conclusion and recommendations:
According to Transparency International Georgia's assessment, the involvement of Electric Installation Service LLC in state procurements raises questions. We call on the Anti-corruption Agency to examine the participation of Electric Installation Service LLC in procurements and determine whether it contains potential signs of corruption.