Voluntary gifts or state robbery? The years 2008-2012
In a previous blog post published on April 22, Transparency International Georgia (TI Georgia) talked about the property donated to the state for a token price by private and legal persons in the years 2004-2007. In that period, the total value of the property donated to the state amounted to GEL 137,837,077, USD 6,003,080 and EUR 10,100.
TI Georgia has also studied property donations that took place in 2008-2012. In this period, the total value of the property gifted to the state amounted to USD 5,565,756.73 and GEL 25,338,041.86. It should be noted that we have revealed cases which give rise to well-founded doubts regarding the value of the property donated to the state. Furthermore, the documents which the Ministry of Economy provided us with often failed to indicate the value of the property. TI Georgia has calculated only those values that were indicated in the document.
In the documents of 2008, motor vehicles dominate the list of property donated to the state, though there were also cases of land plots and other property being donated to the state.
For example, two individuals transferred cars with a total value of USD 86,000 to the state. From, Planeta XXIII LLC, the state received 77 cars in total, including Toyota Hilux, Toyota Corolla, Toyota Camry and Hyundai cars; all of which amounted to USD 1,785,988. Dionise G.S. LLC gifted 21 Toyota Hilux cars and a Toyota Land Cruiser worth USD 506,100, while EuroLine Airways LLC gave cars worth USD 186,098. In the same period, Toyota Center Tbilisi LLC gave the state, free of charge, GEL 1,453,370 worth of cars, while Goodwill LLC gave it49 Toyota Hilux cars, worth GEL 1,675,717.
Several individuals stand out in the list of the property donated to the state. One of them transferred four pieces of real estate located on Rustaveli Avenue with a total area of 689 sq. meters to the state, all free of charge. The documents indicate this property to be valued at USD 930,001. In the same period, another individual handed the state a land plot valued at GEL 700,000, located in Dedaena Park, with an area of 1,095 sq. meters, along with the buildings located on it with a total area of 1,370 sq. meters. In this last case, both the voluntary nature of the deal and the value of the property indicated in the documents should be called into question.
There were also cases when a stake in a company was transferred to the state. For example, in 2008 the shareholder company of Geocell LLC donated a 2.5% stake of its charter capital to the state. The documents provided by the Ministry of Economy indicate USD 250,025 as the value of the stake.
Just as in 2008, motor vehicles take the lead in the list of moveable property transferred to the state in 2009. Several interesting cases were observed in this period. Two individuals transferred 17 cars worth GEL 594,418 and USD 21,000 to the state free of charge. In 2009, yet another person transferred 42 cars worth GEL 1,551,989 to the state.
In 2009, it was not only individuals who gave away cars to the state, but companies as well. Planeta XXIII LLC transferred ten Hyundai Tucson cars worth GEL 308,580 to the state, and JSC Tam gave the state a gift of six Toyota LC70 cars worth GEL 339,570. Irao LLC, an international insurance company, transferred five Volkswagen Passat cars worth GEL 231,880 to the state. Meanwhile, GEL 3,102,139 worth of material valuables was handed over to the state by “Dastakari” union; a description of the nature of this property is, unfortunately, not detailed in the documents.
As for real estate, Georgian Trans Expedition – Poti LLC donated to the state an area of 572 aq. meters from building no. 2 on 1 Kokaia Alley in the city of Poti; an area which is valued at GEL 295,000. From CBR Capital Limited company, the state received, again free of charge, non-agricultural land plots in Tbilisi worth GEL 2,615,000, with a total area of 2,057 sq. meters located at 16 Pagava Street, 11 Tsiskari Street, and 8/21 Mtavarangelozi Street.
In 2010, the state received, all free of charge, GEL 989,892 and USD 301,000 worth of cars from one individual; GEL 1,982,280.74 worth of military equipment from Aviaservisi LLC; and land plot located on Nutsubidze Plateau,Tbilisi, with an area of 2,000 sq. meters and a total value of GEL 100,000 from another individual. JSC Caucasus Agrodevelopment donated 15 land plots located in the village of Lemshveniere to the state. It should be noted that the total value of these land plots is GEL 379,335, and their total area amounts to 689.6 hectares. The state also received an apartment worth GEL 270,000 and with an area of 211.40 sq. meters, located at 4A Tamarashvili Street, Tbilisi, from LLC Reinforced Concrete Sleeper Factory.
There were also cases of stakes in enterprises being donated to the state in 2010;unfortunately, however, the documents do not indicate their value. Whilst on this subject, we should mention the case of JSC TAM Tbilaviamsheni. The stakeholders of this joint stock company gave the state a gift of 18,029,057 shares and a 100% stake. The documents at our disposal do not indicate the value of the shares. Block Georgia LLC also transferred shares in a number of its hospitals in Georgia to the state’s ownership (see a detailed list in the Appendix).
In 2011, the state received assets worth GEL 752,818 and USD 24,783 from individuals, andproperty worth GEL 266,226 from legal persons.
In the same period, real estate and stakes in enterprises were donated to the state by both individuals and legal persons. Unfortunately the information provided is incomplete and thus, in most cases, it is impossible to determine the value of the property.
As in the previous years, 2012 witnessed many cases of gifts from individual and legal entities, being handed over to the state free of charge; sometimes in the form of stakes in enterprises, or else as moveable and immoveable property. Yet once again, we find that the value of the donated property is very rarely indicated. For detailed information about the property, see the attached tables.
The total value of the property donated to the state by individuals and persons involved in private law during 2004-2012, amounted to GEL 163,175,118.86, USD 11,568,836.73 and EUR 10,100.
TI Georgia has been contacted by several people who state that they transferred property to the state under coercion. Our organization once again calls on the affected persons and company representatives to approach our Center for Legal Assistance.