Undisclosed business activities of members of Georgian Parliament - საერთაშორისო გამჭვირვალობა - საქართველო

Undisclosed business activities of members of Georgian Parliament

27 January, 2014

Numerous elected representatives have failed to correctly disclose current and past private sector activities in their annual asset declarations, Transparency International (TI) Georgia has found.

Members of the Georgian Parliament (MP), like more than 2,700 other high-level officials, have to annually disclose their income and assets, and those of the people living in the same household. It is important to know what companies parliamentarians hold shares in and from what recent private sector activities they have received income in order to understand which companies, organizations and interests might affect and shape their behavior in Parliament.

TI Georgia took the data from MPs’ public asset declarations and tried to verify this data with records in the database of legal entities maintained by the Georgian Public Registry. Below we describe the discrepancies we identified. In some of the cases, the companies they are linked with in the public registry database might no longer be operational (entities are not required to file annual public reports that would show if they are active or not). The data below also does not include any shares MPs might have in joint-stock companies, as ownership data of such entities is not public in Georgia.  

MP Levan Kardava (Majoritarian from Tsalenjikha, United National Movement)

In this asset declaration filed at the end of 2013, the only private sector activity Kardava disclosed was his ownership of the company M.D. Group – although he stated that he had not received any income from it. His previous declaration filed in late 2012 contains absolutely no information on his assets.  

In the Georgian public registry we found that in addition to LLC M.D. Group, Kardava also owns LLC Magana-2004 and the construction company LLC Gruppo Via. Furthermore, he holds 25% of shares in LLC Georgian Innovative Nano Technologies.

According to records from the Georgian public registry Kardava sold or transferred shares in several companies after he was voted into Parliament in October 2012: Until October 30, 2012, he held 50% of LLC Telearkhi 25 and in March 2013, he sold his 50% shareholding in LLC Oil Pro. In June 2013, he sold his 25% shareholding of LLC Geomaginvestpromi.

MP Revaz Shavlokhashvili (Majoritarian from Tsalka, Georgian Dream – Conservatives)

Revaz Shavlokhashvili, who was elected as a United National Movement candidate but then moved to the fraction Georgian Dream – Conservatives owns 50% of LLC Saba 2005. He failed to disclose this asset in his most recent declaration submitted in May 2013 or in those he filed while serving as Gamgebeli of the Tsalka region between 2010 and 2012.

MP Tamaz Kacheishvili (Georgian Dream)

Tamaz Kacheishvili has declared his shareholding in two companies, LLC Nugo and of LLC Samegobro, in his asset declaration filed in December 2013. However, he did not disclose that he also owns 25% of LLC Khariskhi. The company registry also lists him as a 5% shareholder of LLC Georgia-German Joint Venture Eko, a company that might be no longer operational (it last filed an update to the public registry in August 2010).

MP Tamaz Shioshvili (Georgian Dream)

Tamaz Shioshvili has failed to disclose in his 2012 and 2013 asset declarations that he owns 35% of LLC Spanish Clay and 30% of LLC Memorex.

MP Giga Bukia1 (Georgian Dream)

Giga Bukia's son, Giorgi Bukia is a 50% shareholder of LLC UCM, a fact the MP did not declare in his December 2013 disclosure.

MP Gogi Liparteliani (Majoritarian from Lentekhi, United National Movement)

Gogi Liparteliani from Lentekhi was a 20% shareholder of LLC Biospero + until April 2, 2013, which he did not correctly make public in declarations submitted in May 2013 and in May 2012. However, he disclosed that his wife was also a shareholder in the company, as well as in a number of other entities – LLC Speroza, LLC Gama+, LLC Gama, LLC Trans-Gas, LLC EuroStyle XXI.

MP Tamaz Avdaliani (Georgian Dream)

Tamaz Avdaliani owned 50% of LLC Asko Ltd and of LLC GeoHolidayTour until January 10, 2013. He failed to disclose this ownership in his declarations submitted in December 2012 and in December 2013.

MP Viktor Japaridze (Majoritarian from Mestia, Georgian Dream)

Viktor Japaridze, the Majoritarian MP from Mestia, was a 50% co-owner of LLC Seti until March 07, 2013, which he did not disclose in asset declarations he filed on December 17, 2013 and on December 11, 2012. In those declarations, he stated that he held shares in another company, LLC Ktsia-94, which TI Georgia was unable to find in the Georgian company registry.

Former MP Irine Imerlishvili2 (Georgian Dream)

A former MP from the Georgian Dream, Irine Imerlishvili, who in November was appointed chairperson of the National Security Council, owns a 70% share of LLC Misho, according to Public Registry’s most recent records from December 19, 2012.

Soon after our blog post was published, Irine Imerlishvili informed us that on December 20, 2012 her representative filed an application to register transfer of her 70% share to the owner of the remaining 30%, Rusudan Minadze. The Public Registry, however, found an error in the documentation submitted and put the review process of the application on hold on the same day. Subsequently, on January 23, 2013 the process was permanently stopped, still leaving Irine Imerlishvili officially as a 70% owner of LLC Misho. The MP was unaware of these circumstances, which resulted in her not disclosing this ownership in her 2012 asset declaration published on December 21, and a more recent declaration submitted in late December 2013, after taking her new position at the NSC.  

Several MPs did not reflect shares in businesses that they sold in 2012 before they were voted into Parliament. The asset declarations require them to disclose income they derived from these transactions. This failure to report the sale may be less problematic from an accountability perspective but technically in violation of disclosure requirements. Furthermore, some officials may hand assets over to trusted front persons or relatives while they hold public office, while they remain the actual owners of the entity.

We want to address the chairman of the Parliament of Georgia to take appropriate measures towards the MPs mentioned in this blog post according to Clause 5, Article 20 of the Law on Conflict of Interest and Corruption in the Public Service and the Parliament's Rules of Procedure.

Yearly submission of the declarations by state officials is an important mechanism promoting transparency and accountability of members of government, but is undermined by the legislation lacking any serious sanction to be applied to the persons withholding such information from the public.

It is in our opinion that the Parliament of Georgia should act upon this matter and adopt the legislation detailing the sanctions that would be applied to the public officials who fail to fully disclose their assets.

1 Blog post was updated according to clarification provided by MP Giga Bukia. 

2 Blog post was updated according to clarification provided by former MP Irine Imerlishvili. 

The article was prepared with financial support from the EU

Author: Giorgi Chanturia; Sandro Kevkhishvili