Who owns RMG Gold?
There are long standing questions about the negative effects of gold mining in Bolnisi. In previous years the main concern was damage inflicted to the environment and the health of local population. More recent concerns have to do with the damage and destruction of the cultural heritage sites in Sakdrisi gold mine. Questions about the identity of actual owners of mining companies have existed under the current as well as all previous governments. Transparency International Georgia attempted to trace the ultimate beneficiaries of these companies, but encountered problems with offshore registrations that render public sources of information useless.
In April 2014, one of the shareholders of RMG Gold Dmitry Troitsky stated that the company had three shareholders: himself, his partner Dmitry Korzhev and a member of Georgian Parliament Koba Nakopia, who is a 22% shareholder. Nakopia denied this information and stated that he owned a minority stake in the company until July 4, 2013 when he sold his shares to the remaining shareholders. He also noted that the buyers have not yet completed their contractual obligations of the transaction, and that the dispute is ongoing. According to Georgian Public Registry, no changes were registered in company share ownership on July 4, 2013. This indicates that the transaction was made between offshore entities that own the company and therefore was not reflected in Georgian documents. In light of these contradictory statements and high public interest we believe that the company should show good will and make public the information about its beneficial owners.
Rich Metals Group, a company registered in the Netherlands, owns 96.21% of RMG Gold. The rest is owned by JSC RMG Copper. The director of RMG Gold is a Russian citizen Sergey Eganov. Its supervisory board consists of three members: Sergey Eganov, Alvidas Brusokas and Vakhtang Paresishvili.
According to the June 2014 statement of the Netherlands Chamber of Commerce, Rich Metals Group is owned by Georgia-registered Minings Developments Georgia, which in turn belongs to Cyprus-registered Pamtilon Holdings Limited. Cyprus-registered company Specimax Co. is the 87.5% owner of Pamtilon Holdings Limited. , Specimax Co. in turn is owned by two other Cyprus-registered companies (Scoremax Holdings Limited and Mountaindrop co. ltd - public sources do not contain any information about the owners and managers of these two companies). Therefore, it is impossible to trace RMG Gold’s ultimate beneficial owners through public sources of information.
In 2012, the company voluntarily unveiled information about its owners. According to media reports, in June 2012 a Russian company Capital Group (owned by Dmitry Korzhev and Dmitry Troitsky) bought the companies Madneuli and Kvartsiti (now RMG Copper and RMG Gold).
According to information provided to us by Transparency International Russia, Korzhev and Troitsky jointly own a network of stores called O'KEY in St. Petersburg. Together with Sergey Eganov they are also members of a supervisory board of a bank called Saint Petersburg. Meanwhile Eganov is the director of ZAO Capital Group (former Neva-Russia). The chairman of ZAO Capital Group’s supervisory board is Vladislav Doronin, a famous Russian billionaire and Naomi Campbell’s former boyfriend.
On June 7, 2012, after RMG Gold was sold, Vakhtang Paresishvili was appointed company director. Information about Paresishvili’s activities is not available through public sources. On June 27 of the same year Dmitry Troitsky, Dmitry Korzhev, Zurab Kutelia and Lasha Akhaladze became members of the supervisory board. According to an investigation by Liberali, Kutelia has been associated with RMG Gold since the 90s. He held high level positions at the Ministry of Environment and its subordinate agencies and chaired the interagency licensing council of experts at the time when a gold mining license was granted to Trans Georgian Resource, a company founded by a state agency - the Department of Geology. A representative of this company Mikheil Chokhonelidze was also a member of the council of experts. Trans Georgian Resource later merged with Kvartsiti Ltd (now RMG Gold) in this way extending the mining license to Kvartsiti.
In June 2014, the composition of RMG Gold’s supervisory board changed to include members including Sergey Eganov, Alvidas Brusokas and Vakhtang Paresishvili. Zurab Kutelia is no longer a member of the board. According to O'KEY’s 2013 report, Alvidas Brusokas and Dmitry Troitsky are both members of the company's Remuneration Committee.
Company ownership until 2012 and ties with other companies
Until 2012 RMG Gold was owned by a Netherlands-registered GPM Georgia, which purchased Kvartsiti in 2011. The then owner of the company GeoProMining Ltd gave its shares in Madneuli and Kvartsiti to GPM Georgia BV. GeoProMining is registered in the Virgin Islands. The company owned 99% of JSC Madneuli and 85.47% of Kvartsiti Ltd (the remaining shares of Kvartsiti are held by Madneuli).
The director of the Dutch company at the time was Vitaly Yablokov. GPM Georgia and GeoProMining are in fact one and the same company, since it was GeoProMining that announced the sale of Madneuli and Kvartsiti in June 2012. The company stated that the decision was based on Madneuli losing its mining license after another company won the government tender.
According to Liberali, one of the canceled licenses was purchased by Caucasian Mining Group on October 3, 2011 for GEL 93.5 million. The second license was purchased by Mining Investment Ltd for GEL 110.5 million. Both companies are owned by a Cyprus-registered Pamtilon Holdings Limited. The supervisory boards of both these companies include Vakhtang Paresishvili, Alvydas Brusokas and Sergey Eganov. In other words, the same people are associated with these two companies and RMG Gold’s current ownership.
Koba Nakopia’s connection with Madneuli and Kvartsiti
None of Koba Nakopia’s asset declarations, as a Member of Parliament, submitted since 2009 mention his shares in RMG Gold. MP Nakopia has declared his son’s Nikoloz Nakopia’s ownership of two Virgin Islands-registered companies Bioneli Limited and Dream Vision Capital Inc. However, their connection with RMG Gold cannot be confirmed through public sources.
Until the end of 2006 Koba Nakopia was the general director of Madneuli. Until 2008, before becoming a Member of Parliament, he is mentioned in Kvartsiti and Madneuli documents as a general director, board member or a representative of GeoProMining. Since 2008 Nakopia is no longer mentioned in the documents of these companies. Public information also no longer mentions his ownership of Madneuli. According to media reports, however, he gave up his shares only in 2011, when Madneuli lost its mining license. In his 2012 asset declaration (covering his economic situation in 2011) Koba Nakopia indicated that his son Nikoloz Nakopia received income of more than half a million lari for his services as an international issues consultant to the general director of Kvartsiti. The declaration of the following year no longer mentions Nikoloz Nakopia holding the same position.
The analysis of public information reveals that it is impossible to identify the company’s beneficial owners and to determine whether the company is connected to the interests of politically active individuals. The lack of information connected to RMG Gold ownership points to the importance of transparency in the ownership of strategic assets in the process of ensuring that the activities of such companies do not become a subject of political speculation.
In order to solve this problem, Georgia should join the Extractive Industries Transparency Initiative (EITI), an international framework that ensures greater transparency and public accountability of companies such as RMG Gold.