Investigation against TBC Bank founders: a timeline

11 May 2018

Bidzina Ivanishvili was elected the chairman of the Georgian Dream – Democratic Georgia party. Later on, Ivanishvili said that unfit rule by former Prime Minister Giorgi Kvirikashvili was the reason for his [Ivanishvili’s] official return to politics.

13 June 2018

Prime Minister Giorgi Kvirikashvili resigned. He said at a briefing that he and Bidzina Ivanishvili had different positions and opinions regarding a number of fundamental issues. At the closed Georgian Dream session held the day before, on 12 June, one of the discussed issues was Anaklia Port, under construction.

The right to implement the Anaklia Port project was acquired by Anaklia Development Consortium based on tender results in February 2016, when Giorgi Kvirikashvili was the prime minister. Anaklia Development Consortium includes: TBC Holding (Georgia, Mamuka Khazaradze’s company), Conti International [1] (USA), SSA Marine [2] (USA), British Wondernet Express (Central Asia) and G-Star Ltd (Bulgaria). The construction of Anaklia port began in December 2017. Prime Minister Giorgi Kvirikashvili, Minister of Economy Dimitri Kumsishvili and Foreign Minister Mikheil Janelidze attended the construction opening ceremony. After the prime minister had been replaced, Kumsishvili and Janelidze also left the Cabinet.

Transparency International Georgia already wrote about the possible connection between the investigation launched against the founders of TBC Bank and the Anaklia Port project.

12 July 2018

Reports that the General Prosecutor’s Office plans to institute criminal proceedings against Mamuka Khazaradze, chairman of the Supervisory Board of TBC Bank, appeared in the press. The Prosecutor’s Office would examine the Bank’s activities for the past 15 years. TBC Bank refuted the information disseminated by the media: “We only have one, very short answer: nothing of the kind is happening. No one has been summoned by the Prosecutor’s Office, as there are no grounds whatsoever for launching an investigation against Mamuka Khazaradze or examining the bank’s activities,” said Tamuna Kirvalidze, media communications manager at TBC Bank.

13 July 2018

Minister of Internal Affairs Giorgi Gakharia refuted the information that law enforcers had launched an investigation against TBC Bank and accused Roman Gotsiridze, chairman of the National Movement Parliamentary Faction, of spreading rumours from the parliamentary rostrum.

17 July 2018

LEPL Financial Monitoring Service of Georgia, operating under the Prime Minister, requested information about persons involved in specific transactions (including their bank statements) from TBC Bank.

24 July 2018

Bidzina Ivanishvili made a statement on Georgian Public Broadcaster in which he talked about the reasons for replacing Kvirikashvili: “I often reminded former Prime Minister Giorgi Kvirikashvili that two banks have devoured the whole country, people cannot pay back their bank loans and this is not normal.”

According to Imedi TV, the name of TBC Bank head Mamuka Khazaradze and the Anaklia Port project featured with regard to the grievances against Kvirikashvili’s economic team.

2 August 2018

The General Prosecutor’s Office of Georgia launched an investigation into a case dating back 11 years – concerning alleged legalisation of illegal income by the TBC Bank founders. According to the statement made by the Prosecutor’s Office, “The investigation established that, in April and May 2008, Samgori Trade, LLC and Samgori M, LLC, as a result of a speeded upprocedure and without a collateral, received a loan amounting to about USD 17m from TBC Bank. As soon as the loan amount was transferred to the companies’ accounts, Mamuka Khazaradze and Badri Japaridze as private persons took from these companies a loan of exactly the amount that TBC Bank loaned them to replenish their working capital. At the end of 2008, TBC Bank, earlier than established by the banking regulations and without providing a substantiation, wrote these loans off, moving them to the external balance account, while in 2012, it freed these companies from the loan obligations before the bank altogether, when it agreed to move thes

e obligations to offshore companies.”

9 August 2018

From 9 until 23 August, the National Bank conducted a targeted inspection of TBC Bank concerning the transactions with Samgori M and Samgori Trade. The owner of a sizeable share of Samgori M and Samgori Trade, Vakhtang Tsereteli, is also the owner of TV Pirveli Company.

4 September 2018

Due to the failure to present to the Monitoring Service the contracts concerning the transactions with Samgori Trade and Samgori M, the National Bank issued an order imposing a fine of GEL 10,000 on TBC Bank, which the bank appealed in court. The court ruled in the bank’s favour and suspended the order on the imposition of a monetary fine.

14 September 2018

From 14 September until 19 October, the National Bank conducted a second, thematic inspection of TBC Bank.

17 September 2018

The Revenue Service scheduled an off-site tax inspection of TBC Bank. It requested the bank to provide banking information and data (without encryption of identifying data) and providing authorised tax officials access to these data (including in bookkeeping and other accounting software), which TBC Bank refused based on regulatory norm concerning banking confidentiality.

10 October 2018

The Revenue Service imposed a GEL 400 fine on TBC Bank for refusing to provide the requested information. The bank’s position was that the tax office would only have the right to receive the information it requested if there was a court order to do so. On 11 October 2018, the tax office asked the court to allow access to TBC Bank’s client database. On 24 December 2018, the Revenue Service withdrew its claim.

26 October 2018

Bidzina Ivanishvili’s statement given to journalists about a business dispute between Vano Chkhartishvili and Mamuka Khazaradze, in which he talked about Khazaradze’s failure to appreciate Ivanishvili:

“Vano Chkhartishvili has been the most considerate one towards me, compared to any other businessman, he has made the most concessions and I am already thanking him for it. And then there is TBC Bank, Khazaradze has not even thanked me properly.”

19 November 2018

The National Bank issued an order imposing a fine of GEL 1.1m on TBC Bank for violating a regulation on the conflict of interests which was in force when the transactions were made, and TBC Bank was prohibited from issuing new loans and guarantees to Mamuka Khazaradze and Badri Japaridze and persons connected to them. The independent members of TBC Bank’s Supervisory Board were given two months to present their position with regard to the violation of legal requirements by the bank administrators.

13 December 2018

Badri Japaridze, co-founder of Anaklia Development Consortium, commented: “All the necessary funding has been mobilised for the first stage of construction of Anaklia Port. The financial institutions have confirmed a loan of USD 400m. As for the capital, we have good news in this respect as well. Two important institutions are joining us – the Dutch development bank and the German development bank. Thus, in the course of 2018, we made a significant progress in terms of financing.”

26 and 31 December 2018

On request of the Prosecutor’s Office, Mamuka Khazaradze and Badri Japaridze testified in Tbilisi City Court. The case was classified and, in addition, to avoid harming the Anaklia project, Khazaradze requested that the investigation was not made public until 16 January.

9 January 2019

The Prosecutor’s Office makes a public statement about launching on 2 August a criminal investigation against Mamuka Khazaradze and Badri Japaridze with regard to legalisation of illegal income. The Prosecutor’s Office also made it public that Mamuka Khazaradze, Badri Japaridze and Avtandil Tsereteli had been questioned. The Prosecutor’s Office did not question Avtandil Tsereteli’s son, Vakhtang Tsereteli, who owns a sizeable share of Samgori M and Samgori Trade.

In parallel with the dissemination of the statement made by the Prosecutor’s Office, posts discrediting Mamuka Khazaradzeappeared on social networks. Anonymous fake Facebook pages which worked against National Movement candidate Grigol Vashadze during the 2018 Presidential Elections are currently trying to discredit Mamuka Khazaradze through social networks, including by means of sponsored posts. The majority of these social network pages were created in the run up to the 2018 Presidential Elections. The same pages disseminate messages supporting the government.

19 January 2018

The public opinion is split on why the government started an “orchestrated attack” on Mamuka Khazaradze. Rustavi 2 disseminated information that special services provided Bidzina Ivanishvili with a secret recording of Giorgi Kvirikashvili and Mamuka Khazaradze, in which Khazaradze refers to Ivanishvili as an oligarch while Kvirikashvili expresses concern regarding Ivanishvili’s informal influence. This information is made more credible by the fact that, at the closed session of Georgian Dream on 12 June, Bidzina Ivanishvili underscored ties between Mamuka Khazaradze and Giorgi Kvirikashvili several times.

22 January 2019

US Chargé d’Affaires Ross Wilson said that he closely followed the processes unfolding against Mamuka Khazaradze and Badri Japaridze, since this could affect the Anaklia project. The chargé d’affaires said that the US ownership of some shares of TBC Bank was another cause underlying his interest.

5 February 2019

Dentons, an international law firm, prepared a conclusion, according to which imposing sanctions on TBC Bank had no legal grounds. It also refuted the existence of a money-laundering scheme.

6 February 2019

The German development bank (DEG) and the Dutch development bank (FMO) decided to invest into Anaklia Port. Anaklia Development Consortium acquired the funding necessary for the first stage of constructing the port – USD 600m, of which USD 400m is an approved loan from the International Financial Institutions.

11 February 2019

Ambassador of France Pascal Meunier commented: “In recent months, there have been negative signals coming from Georgia concerning justice… The events that have unfolded around TBC Bank are strange… Something incorrect may have happened more than 10 years ago but it is unclear to us why this issue has come to the light now, after such a long time, and not before.”

14 February 2019

TBC Bank received a letter from the National Bank, demanding that the chairman of the Supervisory Board of the bank (Mamuka Khazaradze) and its deputy chairman (Badri Japaridze) resign as board members within two months. The regulatory body’s demand is linked to specific transactions made in 2007-2008, which have been categorised by the National Bank as a violation of the legislation regulating the conflict of interests. At issue are the transactions that are being investigated by the Prosecutor’s Office.

With the aim of discrediting Mamuka Khazaradze, anonymous fake Facebook pages working for the government stepped up their activities on social networks again.

Mamuka Khazaradze wrote in the address he posted on his personal Facebook page: “It is also highly suspicious that the decision made so quickly and the smear campaign against us is happening precisely now that we are so close to successfully implementing a project extremely important for the country – Anaklia Port.”

15 February 2019

Parliament Speaker Irakli Kobakhidze commented: “This issue (the issue of TBC Bank) is a legal one and should be resolved by legal means. I cannot talk about political overtones.”

Minister of Internal Affairs Giorgi Gakharia said: “This is a decision made by a regulatory body within the framework of regulating the financial market and I cannot comment on that… TBC Bank is a systemic bank for the country. I am sure that the National Bank and the regulatory body understand this better than anyone… This is why there can be no question marks here…”.

18 February 2019

Fady Asly, head of the Georgian National Committee of the International Chamber of Commerce, said that Bidzina Ivanishvili wants to take over TBC Bank and Anaklia Port by getting rid of Mamuka Khazaradze and Badri Japaridze. According to him, Bidzina Ivanishvili’s ultimate goal is to help Russian companies under sanctions, so that they can bypass these sanctions by means of TBC Bank and fake companies founded in Georgia. As for Anaklia Port, he said that the scenario there entails completely halting the port as this project goes against Russia’s interests.

18 February 2019

Mamuka Khazaradze held a press conference where he said: “There are no hindrances with regard to the Anaklia Port project, so I find it a little worrisome that one of the state structures, the National Bank, made a statement before the completion of the investigation… In fact, several weeks ago, all financial institutions finished the examination of all aspects of the project. We signed the agreement one year ago, we are expecting a financial close-out in May or June, which is quite a complicated process. A speeded-up investigation that the Prosecutor’s Office has launched, leaks in Google and numerous international media outlets that, allegedly, Badri Japaridze and I are linked to some crime, is a direct blow to the procedure of signing the contract… In May and June, we should receive the largest sources of funding from six leading financial institutions of the world. We are talking about USD 600m. This is not about TBC Bank or specific persons, this is about the country, our prospects, the future. This is why I ask everyone to quickly grasp the meaning of the situation, promptly put an end to non-existent issues, so that we can go back to work.”

20 February 2019

The American Chamber of Commerce in Georgia disseminated a special statement concerning TBC Bank, which said: “The actions of the National Bank appear to circumvent accepted legal norms by requesting that the TBC shareholders suspend the authority of the Chairman and Vice-Chairman without full due process. […] Most importantly, we encourage all parties to continue to work towards a timely, fair and transparent solution to this issue. Otherwise, an ongoing, very public dispute will result in irreparable harm to the Georgian economy, reputation and future FDI.”

21 February 2019

Mamuka Khazaradze and Badri Japaridze left TBC Bank. The bank’s Supervisory Board decided to withdraw its lawsuit against the National Bank and to pay the fine of GEL 1.1m. Khazaradze and Japaridze would continue the legal dispute as private persons.

To discredit Mamuka Khazaradze, anonymous fake Facebook pages working for the government stepped up their activities yet again.

22 February 2019

EU Ambassador Carl Hartzell said: “As for TBC Bank, it is an important issue since we are talking about a systemic bank. It has impact on the stability in Georgia’s banking sector. Correspondingly, we will continue following the situation.”

26 February 2019

At the session of Committee on Sector Economy and Economic Policy, the hearing of the National Bank president about the issue of TBC Bank and banking regulations was thwarted. According to the National Bank president, the (public) discussion of the TBC Bank issue by the National Bank in this situation was inappropriate. Mamuka Khazaradze disagreed with the president of the National Bank that his speech in Parliament would harm TBC Bank. Eventually, the members of the parliamentary minority and majority (who shared the position of the National Bank) failed to come to an agreement and the session was thwarted. MPs did not have an opportunity to pose questions to Khazaradze, Japaridze and the National Bank president.

On the same day, Roman Kakulia, chairman of the Parliamentary Committee on Sector Economy and Economic Policy, said that his committee session was a disgrace and such sessions could never benefit the country.

27 February 2019

According to Levan Akhvlediani, general director of Anaklia Development Consortium, unless the processes that have been recently unfolding around the founder of the consortium, Mamuka Khazaradze, end, the financial institutions might not fund the project.

28 February 2019

While in expediency of holding a public discussion of the TBC Bank case was cited as the main reason for thwarting the 26 February committee hearing, on 28 February, the Prosecutor’s Office held a briefing where its representative talked about the 2007-2008 transactions of TBC Bank again and in greater detail. The Prosecutor’s Office offered no important news. It emphasised the violation of the banking regulations, which lies within the area of competence of the National Bank.