NGOs Question TBC Bank Investigation

A number of Georgian non-governmental organizations (NGOs) have released a statement which reads that the investigation of one of the transactions carried out by the largest bank in the country, TBC, 10 years ago, raises some questions.

“The investigation launched by the Prosecutor’s Office against Mamuka Khazaradze and Badri Japaridze, the founders of TBC Bank, on a case of alleged money laundering and other crimes said to have been committed 10 years ago, and the disinformation campaign allegedly orchestrated by ruling party-backed social network pages, creates the logical assumption that the investigation could be biased,” the NGOs say.

The organizations added that concerns increased after the National Bank of Georgia (NBG) insisted the shareholders of TBC Bank dismiss Chairperson Mamuka Khazaradze and Deputy Chairperson Badri Japaridze from the TBC Supervisory Board.

“This request is strange when the abovementioned investigation is still ongoing and the founders of TBC Bank have not been proven guilty. After publication of the mentioned letter of the National Bank of Georgia, the prices of TBC Bank’s stocks, which are listed on the London Stock Exchange, dropped by 6.6%,” the statement reads.

The third sector alleges that the above-mentioned processes may be motivated by business or political interests.

“In both cases, the main concern is over the building of Anaklia Deep Sea Port by TBC Holding. This project has both economic and political value for Georgia. This is the largest and most important project that is being developed by this business group,” they added.

The NGOs expressed hope that the investigation will not hamper the work of TBC Bank or the Anaklia Development Consortium.

“Moreover, the orchestrated attacks by the government and their affiliate disinformation social network pages should be immediately stopped in order to avoid damaging state interests, hampering the development of the port of high economic and political importance and the work of one of the leading Georgian banks. So many unanswered questions cast doubt on the impartiality of justice in Georgia,” the non-governmental sector wrote.

They also added that Mamuka Khazaradze linked the ongoing investigation against him to the issue of Anaklia Port. On 14 February, he wrote the following in a Facebook post: “Another issue that raises questions is that such a hasty decision and ongoing disinformation campaign against us are being made during a period when we are very close to the successful implementation of Anaklia Port – a very important project for our country,” he wrote.

Georgian Prime Minister Mamuka Bakhtadze noted that the National Bank had made a decision as a regulator and if anyone has a complaint about the issue, they should provide arguments.

“TBC Bank is a strong, systemic bank and one of the leading financial institutions not only for the financial sector but for our national economy in general. Therefore, I would like to once again call on everyone to stop political speculation. This has nothing to do with politics,” the PM said.

Georgia’s Minister of Economy and Sustainable Development, Giorgi Kobulia, says the recent issue about TBC Bank represents a “great legal component,” adding the case is currently a priority for law enforcement bodies.

Moreover, TBC Bank’s Press Office told media that TBC Bank has filed a lawsuit against the NBG for suspending the rights of its founders.

"TBC Bank disagrees with the National Bank's position that the Bank violated the law regulating the conflict of interests in 2007-2008,” the statement reads.

Several days ago, the NBG explained the reasons for suspending the authority of Khazaradze and Japaridze. The statement reads that that after examining transactions conducted by TBC Bank 2007-2008, it was revealed that the company founders violated the requirements of the legislation regulating conflict of interests.

The National Bank emphasizes that the supervisory decision and measures of the NBG are not directed against TBC Bank and this “will further improve the quality of the bank's corporate management, which ensures further development of TBC Bank and will make it more attractive for investors.”

On January 9, the Prosecutor’s Office of Georgia (POG) launched the investigation into an operation carried out by TBC Bank in 2008. 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. 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.

TBC rejects the accusations and pledges to defend the legal right of the bank and its shareholders in local and international institutions.

"The allegations that have been voiced against TBC are serious. It is necessary to clear them, and we cannot claim this is political process. I do not have the impression that this particular case is pressure on business, because here there are quite serious allegations that have factual evidence behind them. Therefore, in this matter, the competent authorities should clarify everything,” the Minister said.

By Thea Morrison

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18 February 2019 19:52