According to asset declarations of public officials and the data of the Public Registry, the families of 18 members of the Georgian government (ministers and deputy ministers) are connected with entrepreneurial activity. They own stakes or hold director’s positions in 47 different companies.

Ownership of a stake in a company by a public official or entrepreneurial activity of his/her family member is not, in itself, a violation of law. However, this information must be accessible to the public, in order to rule out conflict of interest in their activity.

With this aim, TI Georgia continues to monitor the asset declarations of public officials. Publication of asset declarations and including accurate data in them is one of the major anti-corruption mechanisms that ensure the transparency of public officials’ income, entrepreneurial activity, and property status. Accordingly, the monitoring of asset declarations serves two major goals: prevention of possible conflict of interest and identification of possible cases of unlawful enrichment of public officials.

TI Georgia’s study has revealed several interesting cases. In particular, the Deputy Minister of Foreign Affairs, Aleksandre Khvtisiashvili, and the Deputy Minister of Environment Protection and Agriculture, Giorgi Khanishvili, have included inaccurate information about their connections with entrepreneurial activity in their asset declarations. 

The Deputy Ministers of Foreign Affairs, Mikheil Ninua and Aleksandre Khvtisiashvili; the Deputy Minister of Economy, Lasha Mikava; the Deputy Minister of Finance, Giorgi Kakauridze; and the Deputy Minister of Environment Protection and Agriculture, Giorgi Khanishvili, have failed to transfer the management rights of their stakes in companies to other persons, which is a violation of the Law on Conflict of Interest and Corruption in Public Service.  

In addition, the Deputy Minister of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Affairs, Zaza Bokhua, and the Deputy Minister of Environment Protection and Agriculture, Giorgi Khanishvili, may be violating the Law on Conflict of Interest and Corruption in Public Service, because the enterprises under their families’ ownership (MedSpace LLC in the case of Zaza Bokhua and Lunch Time LLC, Healthy Food LLC[f1] , Mrovi LLC,  Agro – 1959 LLC and Chkhaveri LLC in the case of Giorgi Khanishvili) presumably come under the regulation and supervision of the very agencies they represent.   

Below we present a detailed overview of connections of members of the government (ministers and deputy ministers) with entrepreneurial activity.

The Ministry of Regional Development and Infrastructure

Maya Tskitishvili – Minister

A day before her appointment to the post, the new Minister of Regional Development and Infrastructure gave her 75% stake in Commercial Property of Tbilisi LLC to her spouse, Davit Khatiashvili, as a gift. Maya Tskitishvili herself no longer owns any stakes in any company, but her spouse, Davit Khatiashvili, is actively involved in entrepreneurial activity. He owns stakes in the following companies:  

Mr. Khatiashvili is one of the directors of Georgia Trade (405048158). This joint stock company actively participates in public procurements and, since 2015, has concluded tender contracts with a value of GEL 708,960 and simplified procurement contracts with a value of GEL 30,930 in total.   

Irakli Karseladze – First Deputy Minister

Irakli Karseladze has not been involved in entrepreneurial activity since assuming the minister’s post. However, in the past, he held the director’s position in various companies related to the Georgian Co-Investment Fund in parallel with being the Chairperson of the Supervisory Board of the Fund.   

Ilia Begiashvili – Deputy Minister                     

Before January 2017, he owned a 100% stake in Spets-Komi LLC, but later he sold his stake and currently is not involved in entrepreneurial activity.  

Grigol Katsia – Deputy Minister   

Grigol Katsia owns 50% and 20% stakes in Georgian Products LLC and Cargo Market LLC, respectively, but in both cases, the management rights of the stake have been transferred to Sergo Lezhava.

The Ministry of Economy and Sustainable Development

Lasha Mikava – Deputy Minister

Lasha Mikava was appointed the Deputy Minister of Economy and Sustainable Development on November 12, 2018. According to the Public Registry data, he owns a 15% stake in Discovery of Wine in Georgia LLC, though he has not transferred the management rights of the stake to another person.  

Nino Enukidze – Deputy Minister

Nino Enukidze does not personally take part in entrepreneurial activity, though her spouse, Mamuka Menagarishvili, owns stakes in two companies:

Interestingly, Nino Enukidze held the position of the Deputy Minister of Energy in 2011-2012. Prior to her appointment as the Deputy Minister of Economy, in the years 2013-2018, she was an advisor to the Director General of Energo Pro Georgia LLC; she also held the position of consultant in legal issues at Socar Georgia Gas; she worked at J.S.C. SakOrgGas (as Deputy Director) and Socar Georgia Gas Distribution LLC as advisor to the Director.

The scope of the activities of the Ministry of Economy and Sustainable Development includes elaboration of the state policy in the energy sector, development of the sector, promotion of investments, etc. At the same time, the activities of Hydrocorps LLC, the company of the spouse of the Minister of Economy, also encompass the energy sector.

Article 2. The Goal and Scope of the Activities of the Joint Stock Company

The scope of the company’s activities includes management consulting and legal consultation, management in general and provision of consultation services in various areas, including in energy projects, as well as work in the energy sector and the purchase and sale of various products, including energy and natural gas, etc.    

In 2016, this company concluded a Memorandum of Understanding with the Ministry of Energy, which envisaged a feasibility study and the environmental and social impact assessment of the construction of hydropower plants on the Khrami River.

Natela Turnava – Deputy Minister

Natela Turnava and her spouse, Davit Veshapidze, own stakes in the following companies:  

Natela Turnava has transferred the management rights of her stake to Irakli Veshapidze.

The Ministry of Foreign Affairs

Giorgi Sharvashidze – Deputy Minister            

Giorgi Sharvashidze owns stakes in two companies. In both cases, the management rights of the stakes have been transferred to Amberki Loria.  

Khatuna Totladze – Deputy Minister

Her spouse, Avtandil Tskvitinidze, is involved in entrepreneurial activity.

Vakhtang Makharoblishvili – Deputy Minister

Vakhtang Makharoblishvili himself is not connected with entrepreneurial activity. However, his brother, Avtandil Makharoblishvili, owns stakes in two companies and also holds the director’s position in one of them. A contract with a value of GEL 721,954 concluded between a company of the Deputy Minister’s brother, Land Mark Project, and the Ministry of Foreign Affairs came under the public spotlight in September 2018, because the company had been newly founded at the time it concluded the contract, while the procurement was financed from the government’s reserve fund and the funds were spent without a tender.

Mikheil Ninua – Deputy Minister

Mikheil Ninua was appointed the Deputy Minister of Foreign Affairs this month. He owns stakes in three companies, but has not yet transferred the management rights of his stakes to another person:

Aleksandre Khvtisiashvili – Deputy Minister

Mr. Khvtisiashvili was appointed the Deputy Minister of Foreign Affairs together with Mr. Ninua. Prior to that, he had held the position of the Director of the Department of International Economic Relations at the Ministry. He failed to indicate his 30% stake in Complex Service LLC in his asset declaration which he filled out while he served in this position. Similarly to Mr. Ninua, Mr. Khvtisiashvili has also failed to transfer the management rights of his stake to another person.   

The Ministry of Finance  

Ivane Machavariani – Deputy Minister

Ivane Machavariani is not currently involved in entrepreneurial activity, although, in the past, he owned stakes in three different companies.   

Giorgi Kakauridze – Deputy Minister

Giorgi Kakauridze owns a 20% stake in Megobroba LLC. However, according to his asset declaration, he has not received any income from this enterprise. He has not transferred the management rights of his stake to another person, which is a violation of law.

In is also interesting that the official email of the company indicated in the declaration is presumably the official email of Giorgi Kakauridze – giorgi.kakauridze@mof.ge, which raises questions about his possible participation in entrepreneurial activity.  

                                                                                       Business Entity                                

Name of company:          Megobroba LLC

Legal address:                   8 Kedia Street, Didube District, Tbilisi, Georgia

Email:                                  giorgi.kakauridze@mof.ge

Identification code:         201944076

Legal form:                        Limited Liability Company

Date of registration:        15/12/1996

Registration number:       2/4-265

Registering body:             Didube District Court

Tax Inspection:                 Tbilisi Regional Center, Administration of Didube-Chugureti District              

Mikheil Dundua – Deputy Minister

The newly appointed Deputy Minister of Finance, who up to now held the position of the Head of the Revenue Service, owns stakes in three companies. Since May 2018, the stakes in all the three companies have been managed by his spouse, Lana Ebralidze.

The Ministry of Education, Science, Culture and Sport

Shalva Gogoladze – Deputy Minister

According to the Deputy Minister’s asset declaration, Shalva Gogoladze and his spouse are involved in entrepreneurial activity. However, according to the declaration, the companies in which Shalva Gogoladze owns stakes or holds the director’s position “are in fact defunct and changes cannot be made to the registered data”. Such companies are as follows: GP Shalva Gogoladze & Partners, D & V LLC, A.M.D.M. Group LLC, Kaulini Georgia LLC, Raimondi LLC, and Sharmi LLC. Transfer of the management rights of the stakes in these companies has not been registered in the Public Registry.

Irine Abuladze – Deputy Minister

Irine Abuladze owns a 0.1% stake in Artvin LLC, though she has transferred the management rights of his stake to another person.  

The Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Affairs

Zaza Bokhua – First Deputy Minister

In accordance with the Public Registry data, the spouse of Zaza Bokhua, Tamar Zambakhidze, owns a 50% stake in MedSpace LLC. According to the company’s statute, its area of activity is the sale of medical products.

1.8. The area of the activity of the company:

1. Sale of medical products;

2. Any activity that is not prohibited by law.

(If the enterprise’s activity is related to the production, processing, distribution, or sale of food/animal feed, or to food production facilities, it is mandatory to indicate the foregoing.) 

In particular, the company specializes in administering laboratory tests on an on-call basis.    

According to the structure [f2] posted on the Ministry’s website, the First Deputy Minister has under his subordination the Emergency Situations Coordination and Urgent Assistance Center and LEPL State Regulation Agency of Medical Activities.  

According to the statute  of LEPL State Regulation Agency of Medical Activities, considering the area of its activity,[f3]  the agency is a regulatory body. The area of its competence includes the issuance of statutory licenses, quality control of medical aid administered to patients by legal and physical persons, examination of citizens’ applications (complaints), etc.

According to the Law on Conflict of Interest and Corruption in Public Service,

“An official or his/her family member may not hold stocks or a capital share in an enterprise, the control of activities of which falls within the powers of this official or his/her office.”

Accordingly, as MedSpace LLC operates in the medical field and comes under the regulation and control of the Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Affairs, the Deputy Minister presumably violates the requirements of the law.

Maya Lagvilava – Deputy Minister

Maya Lagvilava owns stakes in three companies, though in all the cases she has transferred the management rights of her stakes to other persons.   

The Ministry of Environment Protection and Agriculture

Levan Davitashvili – Minister

The spouse of the Minister of Environment Protection and Agriculture owns stakes in the following companies:  

According to the Public Registry data, Levan Davitashvili owns stakes in four companies. He resigned from the director’s position in these companies, although the process of registration of the changes was not completed, as the Public Registry found a shortcoming in the submitted documents.

Giorgi Khanishvili – Deputy Minister

Giorgi Khanishvili’s family is actively involved in entrepreneurial activity. According to the latest asset declaration of the Deputy Minister of Environment Protection and Agriculture, the Deputy Minister himself, his spouse, and underage son own stakes in various companies.

According to the Public Registry data, Giorgi Khanishvili holds the director’s position in Healthy Food LLC, and he has not transferred the management rights of his stake to another person. In addition, Giorgi Khanishvili’s stake in Chkhaveri LLC has not been transferred to another person and his ownership of a 50% stake in this company is not mentioned in his asset declaration. According to the Public Registry data, Giorgi Khanishvli is the director of Davit Sarajishvili Alco LLC. All these cases violate the Law on Conflict of Interest and Corruption in Public Service.

In addition, according to the Public Registry data, Lunch Time LLC, Healthy Food LLC, Mrovi LLC, and Agro – 1959 LLC operate in the sector of nutrition facilities and food production, whereas the state control in the area of food safety is exercised by LEPL National Food Agency, which is part of the system the Ministry of Environment Protection and Agriculture.

Business Entity

Name of company:          Lunch Time LLC

Legal address:                   8 Chachava Street (land plot no. 004/086), Didube-Chugureti District, Tbilisi,

Georgia

Identification code:         401968206

Legal form:                        Limited Liability Company

Date of registration:        07/03/2012

Registering body:             Public Registry  

Tax Inspection:                 Tbilisi Regional Center, Administration of Didube-Chugureti District              

Type of Activity/Type of Product

• Trading from the counter
• Café
• Restaurant
• Production of ready-made meals, culinary products and semi-processed foods
• Production of confectionaries
• Production of wheat, wheat products and cereals
• Processing and production of meat and meat products

Business Entity

Name of company:          Healthy Food LLC

Legal address:                   10 Margiani Street, Vake-Saburtalo District, Tbilisi,

Georgia

Identification code:         404921723  

Legal form:                        Limited Liability Company

Date of registration:        13/12/2011

Registering body:             Public Registry 

Tax Inspection:                 Tbilisi Regional Center, Administration of Vake-Saburtalo District  

Type of Activity/Type of Product

• Trading from the counter
• Market
• Mobile stands for food products or non-alcoholic drinks (including coffee, fruit juices, energy drinks)
• Buffet
• Cafe
• Restaurant
• Canteen
• Production and packaging of children’s (including infants’) food products
• Processing and production of fish and sea products
• Processing and production of poultry products
• Production of ready-made meals, culinary products and semi-processed foods
• Production of confectionaries
• Distribution network
• Storage facilities (refrigerators, warehouses, containers, etc)  
• Food producer   

Statute of Mrovi LLC

2. The Goal and Area of the Company’s Activity

1. The goal of the company: Receiving a profit.

2. The main areas of the company’s activity are as follows:

               - export, acquisition and sale of oil and oil products;

               - arrangement of gas stations and auto repair shops;

               - arrangement of a trade center;  

               - arrangement of nutrition facilities.                                            

Statute of Agro – 1959 LLC

2. The Goal and Area of the Company’s Activity

1. The goal of the company: Receiving a profit.

2. The main area of the company’s activity is as follows: growing, acquisition, processing, packaging, storage and sale of agricultural crops;

               - The company may also carry out other activities that are not prohibited by the Georgian legislation. The company may conduct activities that require a special permit after obtaining such a permit.  

2.2. The company shall conduct its activities in accordance with this Statute, the Law of Georgia on Entrepreneurs, and the applicable legislation of Georgia.  

According to the Law on Conflict of Interest and Corruption in Public Service,

“An official or his/her family member may not hold stocks or a capital share in an enterprise, the control of activities of which falls within the powers of this official or his/her office.”

Accordingly, the aforementioned cases may be a violation of this requirement of the law.

It is also interesting to have a look at another company of Giorgi Khanishvili, Chkhaveri LLC, whose statute envisages processing of grapes and production of various alcoholic and non-alcoholic drinks.

2.1. The company shall carry out the following activities both in Georgia and abroad:

            - cultivation, growing and sale of saplings of Chkhaveri and other varieties of grape;  

            - acquisition [f4] and processing of grapes;

            - acquisition and processing of prunus and spermatophyte fruits;

            - production of cognac wine;

            - production of must;                      

            - sale of dry wine;                                                 

            - distillation and ageing of congac spirit;

            - sale of cognac spirit;

            - bottling, packaging, and sale of must;  

            - production of canned products –  specifically, juices, jams, stewed fruit, etc., –  from

  acquired fruits;                                              

            - production of various non-alcoholic drinks;

            - production of low-volume alcoholic drinks;         

            - acquisition and sale of other agricultural products (bay leaves, hazelnuts, tea);

            - barter of products.  

LEPL National Wine Agency, which is part of the system of the Ministry of Environment Protection and Agriculture, regulates the sector of viticulture and winemaking and exercises supervision with this purpose, including:   

1. regulation of the sector of viticulture and winemaking in Georgia and exercise of supervision with this purpose;  
2. exercise of state supervision on the production, storage, processing, and sale of grape-based alcoholic drinks produced in Georgia;

5. promotion of export of grape-based alcoholic drinks and diversification of export markets;

1. issuance of compliance certificates to grape-based alcoholic drinks;

o)   participation in the implementation of targeted state programs;

17. review of cases of administrative offenses with the aim of imposing administrative penalties, within the limits of statutory powers.  

Therefore, the ownership of a stake in Chkhaveri LLC by Giorgi Khanishvili may also contradict the requirements of the Law on Conflict of Interest and Corruption in Public Service.

In addition, in his latest asset declaration, the Deputy Minister indicated his son as the owner of a stake in Agro – 1959 LLC. However, the Entrepreneurial Registry indicates the name of Giorgi Khanishvili himself instead of that of his son. Since the time the company was founded, the owner of its 100% stake (Giorgi Khanishvili) has not been changed. However, at present, Tamaz Kutkhashvili is indicated as the manager of the stake. In the declarations of the previous years, Mr. Khanishvili indicated his name as the owner of this company and received an income: GEL 68,798 in 2015, GEL 69,858 in 2014, and GEL 65,107 in 2013.

The same is the case with regard to Lunch Time LLC. Giorgi Khanishvili indicated this company as the property of his son (with a 25% stake), but the registry data indicate him as the owner and Tamaz Kutkhashvili as the manager of the stake. In the declarations of the previous years, Giorgi Khanishvili indicated that he owned a stake and received an income from this company: GEL 6,133 in 2014 and GEL 121,652 in 2013.  

It is noteworthy that another 25% stake in this company is owned by Nikoloz Bakhtadze, who donated GEL 60,000 to the Georgian Dream on April 24, 2014.

Giorgi Khanishvili owns a 25% stake in Caucasus Light LLC, while another owner of a 25% stake of this company, Ioseb Akhalkatsi, donated GEL 55,000 to the Georgian Dream on July 1, 2016.

Giorgi Khanishvili’s spouse, Anna Ekaladze, owns a 1.66% stake in Women’s Consultation No. 1 LLC, from which she received an income of GEL 76,481.00 last year.   

• According to the 2017 declaration of the Deputy Minister of Environment Protection and Agriculture, his 15-year-old son, Giorgi Khanishvili, owned a 40% stake in L.B. Invest-Group LLC, from which he had received an income of GEL 354,900 in 2016. However, as we find out from the Entrepreneurial Registry, the Deputy Minister’s son has never owned a stake in this company. Until July 6, 2017, Giorgi Khanishvili himself owned a 40% stake in the company, while since August 25 of the same year, the 100% stake in the company has been under the ownership of his business partner, Vasil Khanishvili (43001000533). Accordingly, it is not clear why Giorgi Khanishvili declared the income from his company in the name of his son. It should also be noted that in declarations of the previous years, Giorgi Khanishvili had declared the income from this company in his name: GEL 418,000 in 2015, GEL 393,775 in 2014, and GEL 391,296 in 2013.

There is one more detail that is noteworthy in Giorgi Khanishvili’s asset declaration:

According to his asset declaration of 2018, his family owns USD 930,000 in cash; the 2017 declaration indicates cash in the amount of USD 950,000, while the amount indicated in the 2016 declaration is USD 1.2 million.

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The Office of the State Minister of Georgia for Reconciliation and Civic Equality  

Ketevan Tsikhelashvili – State Minister

Ketevan Tsikhelashvili’s spouse, Armin Hutenloher, is connected with entrepreneurial activity. He is a shareholder of Holding Omnicom/N.Y. (holding) (100%) and owns a 100% stake in Private Company RES-Public and Corporate Relations LLC.