International Group Assessment: Evidence shows that the purpose of Khazaradze and Japaridze scheme was money laundering
By Natalia Kochiashvili
Friday, October 18
The prosecutor's office says the International Prosecutors' Advisory Group has completed work.
In a letter sent to the Georgian Chief Prosecutor Shalva Tadumadze, the panel explained that the evidence presented to them by prosecution “demonstrates a scheme” by TBC Bank founders Mamuka Khazaradze and Badri Japaridze “to conceal the unlawful distribution of bank funds” constituted money-laundering, “the generic predicate crime for which was fraud.”
The letter reads: “The evidence documents irregularities, including that within hours of receiving funds from TBC Bank, Samgori M ltd and Samgori Trade ltd siphoned the funds to Mamuka Khazaradze and Badri Japaridze, who were senior officers of JSC TBC Bank.”
“Taken in isolation, any one of the irregularities uncovered in the investigation might not establish criminal conduct in the processing of the loans in 2007 and 2008 as opposed to revealing a technical violation of civil banking law,” it further notes, adding that “facts do not exist in isolation.”
Report reads, that by separately examining the violations found during the investigation, it may not be possible to determine the existence of unlawful conduct in respect of loans issued in 2007 and 2008, but rather a technical breach of banking law. However, since the facts do not exist separately:
“Based “solely on the case materials” provided to the panel, it views the evidence as “sufficient to demonstrate the necessary predicate crime of fraud, therefore, justifying the indictments filed against” Khazaradze and Japaridze, as well as businessman Avtandil Tsereteli “for the legalisation of illicit revenues”.
Regarding this letter, Khazaradze says the prosecutor's office is incompetent and will comment on the matter in court. Besides that, The founder of TBC Bank spoke about the acquisition of Bank Republic by TBC Bank on the main channel. Khazaradze said that in 2016, when TBC Bank Republic was planning to buy the bank and the deal was almost closed, the National Bank suspended the transaction for no reason. Khazaradze says he raised the issue of the suspended transaction during a private meeting with Bidzina Ivanishvili.
Khazaradze said afterward Ivanishvili asked him to buy the Progress Bank and insisted that in this case, the Republic Bank would also be completed. TBC Bank Owner also says that Progress Bank's audit has revealed a critically undesirable situation and that is why TBC has acquired Progress Bank's only healthy assets.
Khazaradze said other assets and transactions raised suspicions of money laundering. Founder of Lelo says these doubts were further compounded by the National Bank's decision to liquidate these dubious assets. On October 19, 2016, National Bank canceled banking license for Progress Bank.
This is not the first time he has recalled an episode of Progress Bank.
This issue was also relevant in the spring. At the time of the parliamentary hearing, Khazaradze first spoke about Bidzina Ivanishvili's request for a bank of progress.
The deal between TBC Bank and Societe Generale was closed in September 2016. TBC acquired a 93% stake in Republic Bank and also purchased Progress Bank's assets under the same deal. The total deal was valued at GEL 315 million.
The National Bank revoked its Progress Bank license in October of that year.
Progress Bank was founded by Kakha Kaladze in 2007, with Bidzina Ivanishvili owning a 22% stake in Progress Bank.
“I call on Ivanishvili's personal lawyer to request all the materials from the National Bank and to inform the public about this with briefings, just like he did about us. I am telling you directly, there have been comments as if we want something to overlap, it has nothing to do with it. We got rid of TBC Bank, got rid of Anaklia just to let the public know that any transactions we make are very open, very transparent, we go to court and the public will know what the absurd accusation is. If this is the approach, then all such issues should be investigated by the prosecutor's office and law enforcement agencies,” - Khazaradze said.
He also announced, that the original of the so-called threat letter, which he said was sent by former Interior Minister and current Prime Minister Giorgi Gakharia, will be handed over to the prosecutor's office. Speaking to the Budget and Finance Committee on March 4, Khazaradze said that before the second round of the 2018 presidential elections he received the letter which threatened to harm his and the bank's reputation if three conditions were not met.
Khazaradze and Japaridze were charged in late July with laundering $16.7 million back in 2007-2008, an accusation they call "absurd." Avtandil Tsereteli, the owner of Samgori M ltd and Samgori Trade ltd, has also been charged as an accomplice.
Khazaradze has founded the civic movement Lelo and has plans to create a political party in the coming months ahead of the 2020 parliamentary elections. He is also involved in the construction of Anaklia Deep-Sea port.