GEO

What are Businessmen’s Accusations against former Government and Colleagues

14 November, 2012

According to the World Bank’s 2012 Ease of Doing Business Ranking, Georgia has moved forward and got the 9th place. Needless to say putting in place appropriate and progressive legislation is very good. Indeed throughout the years many positive reforms were implemented in this regard in Georgia, but the abovementioned global research is mainly focused on procedural issues and because of methodology, does not reflect those problems and barriers that businesses have experienced in recent years in practice.

After recent parliamentary elections, many representatives of business-sector often talked about the state’s pressure and forceful deprivation of property.

Several representatives of different businesses openly talk about the pressure which was put on them. Some businessmen blame concrete high-ranking officials, politicians and in some cases, their colleagues.  Each of the below mentioned case requires an in-depth investigation. At the same time, these allegations of pressure and intimidation clearly indicate that there might be problems in terms of business freedom in Georgia.

Oil-production sector

According to Jemal Leonidze, one of the founders of the company “Magnati-2006”on August 13, 2010 he was arrested on charges of fraud. Later he was found guilty and was sentenced to 10 years and 6 months imprisonment.  Leonidze is still imprisoned.

 “Magnati 2006” was one of the major players in Georgia’s oil-production market. The company had 43 gas stations, 4 oil terminals, 3 restaurants, poultry farms and other movable property.

According to Mr. Leonidze, from the end of 2008, deliberate actions have started against him with the purpose of his removal from the company. Imprisoned owner talks about the campaign carried out against him in which two commercial banks together with the Prosecutor’s Office and tax authorities, participated.

As Jemal Leonidze says, the company was deliberately forced into bankruptcy and the assets were devalued. Ultimately, the company was sold to “Sun Petroleum Georgia” which owns GULF’s gas stations. According to Leonidze, his other businesses were taken away in a similar way.

Media Sector

Davit Dvali and Jarji Akhimidze, founders of “Rustavi 2”, released a statement on October 10, 2012. According to them, they were forced to give up 60% stake of the company. Dvali and Akhimidze also talked about the pressure coming from the high-ranking officials.

In October, the former founder Badri Patarkatsishvili’s family got back the broadcast company “Imedi” for a symbolic price. According to the new owner of the TV Company, Ina Gudavadze, after the parliamentary elections, her family was contacted and offered back the TV Company.  Negotiations were soon over and the TV station “Imedi”, which was owned previously by persons associated with the former government, was given back to the old holder.  Joseph Kay, who is a relative of Patarkatsishvili, remained as the co-owner of 10 % of the TV Company.

Banking Sector

Sergo Iakobidze, the former director and shareholder of Postal Bank, talks about the pressure from the former government. According to Iakobidze, Zaza Gorozia, was actively involved in taking away his businesses. At first, he was requested to finance the “National Movement”, and then to give up 80% of ownership shares. Today Iakobidze is charged with the appropriation of pensions and is wanted by Interpol.

Communications Sector

Also a statement was made by Vazha Samadbegashvili, one of the founders of international call operator 8-15. Samadbegishvili and his wife were charged with fraud and arrested. According to Samadbegashvili, his arrest was not fair and actually aimed at removing him from the company. According to Samadbegishvili, he and other partners incurred financial losses due to the fraudulent actions of one of the partner. This fact can be proven by the Financial Police’s examination act. This examination act revealed committed crime of one shareholder. However, Samadbegishvili could not protect his rights through the court and even more, according to him, law enforcement agencies, closely related to the one of the partners started his deliberate persecution.

Another statement was released by Mamia Sanadiradze, the former owner of “Caucasus Online”. Pressure on him and his company has started in 2008. During the first stage, communication company “Silknet” was trying to hinder “Caucasus Online” activities. According to Mamia Sanadiradze, there were cases when the employees of “Silknet” were deliberately damaging the company’s  cables, thus impeding the provision of  Internet .  “Caucasus Online” appealed to the Ministry of Internal Affairs and Georgian National Communication Commission but to no avail. According to Sanadiradze, the pressure on him was increased after he refused to collaborate with the Ministry of Internal Affairs in court hearings. Finally, as Mamia Sanadiradze says, he was forced to give up his company and leave the country.

Various

In October 2012, Anzor Kokoladze, the former owner of “Elit Electronics”, released a statement and said that TBC Bank has actively participated in his business confiscation scheme. He requested from TBC Bank to give back his shares and asked for the denouncement of the court decision on the basis of which he was deprived of his shares. According to the former founder of “Elit Electronics”, he was covering all his liabilities on time and there was no basis for alienating his shares.  Khokholadze also denies prosecutor’s accusations of fraud and says that he was illegally detained and the bank together with the former government acted jointly to remove him from the company.

Representatives of TBC Bank deny Kokoladze’s accusations and say that they re-registered his shares because of the accumulated debts of the former owner of “Elit Electronics”. In this way, the bank recovered its debt claims. According to TBC representatives bank tried to support Kokoladze and prolonged credits and even gave new credit lines, however obligations were still not fulfilled duly. 

A statement was also made by Mindia Kashibadze, the former owner of “Maxstop”. He said that he has been subjected to pressure for years by high-ranking officials . Khashibadze blamed the parliament’s former vice-speaker Mikheil Matchavariani, and also high-ranking officials of the Financial Police, Irakli Kirkitadze and Levan Pkhaladze.

David Begiashvili, the owner of the shop “Albatros” also talks about the takeover of his property. According to Begiashvili, high-ranking officials of the Constitutional Security Department, Prosecutor’s Office and tax authorities have participated in a campaign against him. Investigation was launched against Begiashvili and he was arrested for allegedly obtaining property by means of fraud. There were many episodes in his case. Finally, Begiashvili had to flee the country and has received political asylum in Switzerland.

This is just a small number of the statements, which were recently made by several businessmen. Statements continue to be made and the public will get more information in the nearest future.

It is important that the government launches an in-depth investigation into the mentioned cases as soon as possible. We think that for improving business environment in Georgia it is crucial to bring justice into the business sector.

Author: TI Georgia