Today, on 18 March 2014, the Chief Prosecutor's Office of Georgia summoned the former Minister of Economy of Georgia, the founder of the Free University and the Knowledge Fund, businessman Kakha Bendukidze for interrogation as a witness over privatization of large amount of real property credited on the balance of the Agricultural University.
According to the statement [1] released by the Prosecutor's Office, the case concerns contribution of movable and immovable property on the balance of 14 research institutions of the LEPL State Agricultural University of Georgia to the capital of the Agricultural University's daughter company Agromet LLC by devaluing it in advance, and the privatization of 100% shares of Agromet for 5,150,000 USD with the investment obligation of 8,000,000 GEL.
The statement of the Prosecutor's Office claims that only the book value of movable-immovable property contributed to Agromet [2] LLC's charter capital is worth 65 million GEL. According to the Prosecutor's Office, the market value of only one portion of privatized property - 59 ha land plot located at 12th km Aghmashenebeli Avenue in Tbilisi - is 10,790,000 GEL, which was contributed to the capital for 59,000 GEL (1 sq.m for 10 Tetris). Other pieces of property were devalued in a similar manner.
Confrontation between the management of the Agricultural University and the authorities unfolded in March 2013, when the Authorization Council of the National Center for Educational Quality Enhancement decided to revoke the authorization of the Agricultural University, to which our organization has reacted with the statement. Decision of the Authorization Council has triggered back then student protests for several days. Later the state agency has changed its position and reinstated the Agricultural University's authorization. Currently two thousand students are enrolled in the Agricultural University and it is one of the top-ranked higher education institutions in Georgia with a modern logistics base.
The Agricultural University of Georgia was transferred to Kakha Bendukidze's organization under management right in 2011, while in 2012 it has privatized for 5 million USD (approximately 9 million GEL). Privatization terms provided that the institution would maintain education profile for at least 8 years, and that in addition 8 million GEL would be invested.
According to the current management of the Agricultural University, since 2012 until January 2014 the University made the following investments:
In 2013 Transparency International (TI) Georgia released a study [3] on the property sold by the state to private persons for symbolic amounts. The research has identified a number of investors that had received state property for 1 GEL and did not fulfill their investment obligations. Unfortunately, the Georgian authorities have not duly inquired into any of such cases until now. It seems that only Kakha Bendukidze's privatization was probed into and the Prosecutor's Office of Georgia has launched criminal prosecution only on this specific case.
Investigation into the activities of the Agricultural University and Kakha Bendukidze deserves particular attention, especially when there are numerous persons who have received state property for symbolic amounts and failed to make any investments. Further, a high public interest towards the case is generated also by Kakha Bendukidze's critical attitude towards the Georgian authorities.
In view of all the above, we believe it is crucial that the case of the Agricultural University is administered transparently and impartially. It is necessary for the public to have full, impartial and timely information on the developments, and to avoid an impression that the investigation is politically motivated. It is vital that the state, on one hand, firmly observes the law and applies the rule of law principle to all persons regardless of their political views or status, and on the other hand, protects the lawful interests of investors. In light of high relevance of the issue, TI Georgia will watch closely further developments.