TBC Denies Slander

The Prosecutor’s Office of Georgia (POG) has launched an investigation into an operation carried out by TBC Bank in 2008.

The POG announced the fact on January 9, after TBC Bank released a statement regarding the “deliberate black PR against the Bank.”

Prosecutor Salome Chikobava said during the briefing held at the General Prosecutor’s Office that the Financial Monitoring Service had begun checking the financial activities of TBC Bank and its shareholders in May of 2018.

She noted an investigation is underway into “facts of the legalization of illicit income.”

The POG claims that in April-May 2008, companies Samgori M and Samgori Trade took loans to the amount of $17 million from TBC Bank. On the same day, a loan was issued to individuals Badri Japaridze and Mamuka Khazaradze, co-founders of TBC Bank Group and its Chairmen.

The agency claims that none of the companies paid back the loans and later they [companies] were replaced by an offshore company but the loan was not paid back to the bank.

“In May 2018, the Financial Monitoring Service of Georgia started studying the financial activities of TBC Bank, its legal entity customers, shareholders and administrators. The study revealed that specific activities included signs of illicit income legalization or money laundering. The materials were sent to the National Bank as well to the Prosecutor's Office of Georgia. Based on these materials, on August 2 of 2018, the Investigative Department of the POG launched an investigation into the fact of legalization of illicit income,” the statement of the POG reads.

Before the briefing of the POG, TBC Bank released a statement, saying they will not tolerate the “deliberate destruction of the bank’s reputation.”

“If necessary, we will use all the leverage available to protect the legitimate interests of TBC Bank, its founders and international shareholders,” the statement reads.

The bank says documents obtained by the Prosecutor's Office are related to the 2008 legal banking operation, which, as they say, has been several times checked by auditors and the National Bank of Georgia (NBG) during the current and the previous governments.

“It is unfortunate that during the 27-year existence of TBC Bank, and under all governments, the Bank has been object to attack. TBC Bank and its management have seen a number of crises and have always proven their truth,” the statement reads.

The Bank says several media portals released “erroneous and deliberately distorted information that serves to damage the country's leading financial institution and its founders' reputation.”

The National Bank of Georgia released a statement regarding the case saying that TBC Bank is a healthy crediting organization and has an adequate level of liquidation resources and capital.

“Investigation into the case of TBC Bank will not affect the sustainable and efficient functioning of the banking sector,” reads the statement.

Zviad Kordzadze, the attorney of TBC Bank's Supervisory Board Chair, says that the POG questioned Mamuka Khazaradze several days prior to New Year.

The lawyer says the Article, under which the investigation is being carried out, is “absurd.”

“The rumors about money laundering are nonsense. The operation was absolutely open and transparent. The POG did not mention that the money was returned to the bank. Mamuka Khazaradze borrowed money from a certain person and returned the loan to the bank's capital,” Kordzadze said.

The Banking Association of Georgia released a statement regarding the case, saying “such a campaign” can damage the reputation of a particular bank and the entire banking system, which will negatively impact the country's economic development.

“Incorrect interpretations of recent developments regarding TBC Bank, and speculations receiving high interest from the public, can damage the correct perception of reality and lead to false expectations regarding the development of the process,” the statement reads.

The Banking Association of Georgia says they will always protect the interests of its member banks and will not allow a “deliberate slanderous campaign against the leading financial institution of the country.”

Gigi Ugulava, one of the leaders of the parliamentary minority European Georgia, believes the recent developments surrounding TBC bank are linked with the ruling Georgian Dream (GD) Founder and Chair, billionaire Bidzina Ivanishvili.

“Khazaradze was trying to get on well with Ivanishvili before but it did not work…The recent developments mean that Ivanishvili personally threatened Khazaradze…We see business cannot breathe freely,” Ugulava said.

Yet GD member Gia Volsky excludes any political motives in the TBC Bank case. “It is impossible to blame such a huge financial institution so groundlessly. No-one would even dream of such a thing,” he said.

TBC Bank is the largest bank in Georgia. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

OFFICIAL STATEMENT FROM TBC BANK:

On January 8, late in the evening, several media portals spread misinformation aimed at discrediting the leading financial institution of the country and its shareholders.

Such actions undoubtedly aim to damage TBC Bank JSC, which is an important institution in the country, at local as well as international level.

We hereby categorically deny the false accusations and misleading information carefully orchestrated by the forces behind the dark PR.

TBC Bank is and will remain the leading financial institution in the country and the region, observing the best practices of corporate governance and social responsibility, which has been duly recognized by international institutions and investors.

Being a leading Public Limited Company with a premium listing (FTSE250), TBC Bank represents in Georgia interests of investors and shareholders from all of the five continents of the world.

Regrettably, in the course of 27 years since its inception, TBC Bank has been a target of assaults under every government. The Bank and its shareholders have gone through multiple crises but have always been able, and will be able in the future, to assert their truth.

As concerns the comment made by the Office of the Prosecutor with respect to the collection of documents, it is related to an ordinary, legitimate bank transaction performed in 2008, which:

• has been examined by state structures and the National Bank of Georgia on several occasions in relevant periods under the present as well as the previous government;

* has been examined and verified as legitimate by international auditors on several occasions;


* Furthermore, the statute of limitations for the transaction has expired.

TBC Bank is not going to disregard this deliberate attempt to discredit and tarnish its reputation, irrespective of the source of the misinformation, and will apply all available local and international instruments for the protection of the legitimate interests of the Bank, its founders and international shareholders.

By Thea Morrison

Image source: Georgia About