Finance company heads sent to pre-trial detention

Tbilisi City Court has sent two chairpersons of the Georgia Finance Company to pre-trial detention after the company left about 1,300 affected depositors owing 76million GEL.

The detainees were the director of the Georgia Finance Company, Tamaz Lobzhanidze, and company manager Merab Peradze.

Their lawyer asked for the defendants to be released on 10,000 GEL bail each but her request was not met.

The Judge stated there was a risk that the accused will flee the country if released on bail.

The affected people applauded the court’s decision and stated they were waiting for their money back.

The fact that the people put their money in the company was due to a more than 30% annual interest rate they received for their deposits.

The company leadership says if they stay in prison for too long, they will never be able to return the money.

Peradze, the company manager, said it was Georgia’s National Bank which had created problems for the company after which the Georgia Finance Company could no longer pay interest rates to its depositors.

He added there were "political interests” behind this. However, he did not specify what he meant by this.

Prior to the trial, the affected depositors held rallies in front of the Administration of the Government of Georgia, demanding the Government’s help in getting their money back.

The fact that the company’s senior managers, who allegedly cheated the people, are behind bars can be viewed as a positive step and a deterrent against other would-be financial criminals, but only this will not be any relief for the people who are waiting for their money.

The most important thing is whether the money will be returned back or not.

The managers’ property isn’t enough for covering their debts, as their current properties had been mortgaged.

Georgians faced similar problems in the 1990s, when many of the country’s citizens opened deposit accounts to gain high profits from interest rates. However, all of them lost their money.

It seems Georgians are still not aware of the risks, as offering such a high interest rate should somehow be a hint for many not to put their money in the company.

The National Bank of Georgia should also have very clearly warned Georgian citizens about possible risks.