The founder of one of Georgia’s largest banks, TBC, has accused the interior minister of sending him a ‘threatening’ letter during last autumn’s presidential elections.

Mamuka Khazaradze, the former chair of TBC Bank Group, gave a statement to the Prosecutor’s Office on Tuesday in the presence of a judge at Tbilisi City Court.

‘I’ve submitted a copy of the letter to the Prosecutor’s Office; the original has been sent to London for expert analysis’, Khazaradze told journalists following the court hearing.

Khazaradze stepped down as chair of TBC on 21 February, after the National Bank ordered he and his deputy be removed over money laundering allegations.

The banker recounted his version of the relationship between the government and TBC while addressing parliament on 4 March.

He told lawmakers that he had received a threatening letter from interior minister Giorgi Gakharia before 29 November’s presidential run-off, adding that he had reported it to the Prosecutor’s Office but that they had not followed up on his claim.

‘There were some demands which we didn't comply with, and don't intend to’, Khazaradze told MPs.

According to the Prosecutor’s Office, Khazaradze was questioned in the presence of a judge as part of the money laundering investigation on 26 December.

During 4 March’s parliamentary hearings, Khazaradze also accused the National Bank of Georgia of issuing politically motivated fines to TBC — first ₾10,000 ($3,700) and then ₾1 million ($375,000)  for violating regulations related to conflicts of interest.

Khazaradze told lawmakers at the Parliamentary Budget and Finance Committee that the head of the National Bank, Koba Gvenetadze, had dismissed his personal inquiry into the first fine, making a passing reference to ‘politicians’.

‘That’s when I realised that this man was not independent, that this agency was not independent in their decisions’, Khazaradze said.

Khazaradze went on to say that the National Bank’s head even asked him to challenge the initial fine in court, which he said suggested that Gvenetadze was ‘in a hopeless situation’.

Reactions

While Khazaradze gave testimony to the Prosecutor’s Office on Tuesday, European Georgia, the largest opposition grouping in parliament, started collecting signatures of MPs demanding an investigative commission be set up to look into the banker’s claims.

‘TBC Bank represents the leading financial institution of this country, while the Anaklia Port [project] has strategic importance for Georgia’s economy and Georgia’s security’, European Georgia’s Davit Bakradze told OC Media in a statement via email on 5 March.

He added that the allegations of senior officials being ‘directly involved in pressuring business’ was another reason for the creation of a committee.

Speaking to the Georgian Public Broadcaster, European Georgia’s Sergi Kapanadze said that in the latest scandal, ‘the Prosecutor’s Office represents a side’ and hence ‘cannot be trusted’.

On 5 March, over 15 leading Georgian watchdog groups put out a joint statement saying that the latest scandal strengthened their concerns about ‘informal rule and the growing trend of state capture’ in Georgia, ‘a trend incompatible with democratic rule and dangerous for the constitutional order’.

In their statement, Transparency International — Georgia, ISFED, the Georgian Democracy Initiative, Open Society Georgia and other groups supported the idea of a parliamentary probe and also called on Khazaradze to make the letter from Gakharia public.

Khazaradze said during the 4 March parliamentary hearing that he would make the letter available to the public after ‘an investigatory body is created’.

The Prosecutor’s Office has insisted since Monday that Khazaradze’s claims were not truthful; later that day they published a short portion from the record of his testimony.

In a passage from his 26 December testimony released by the authorities, Khazaradze allegedly complained that the National Bank’s intention to seek his and his deputy’s resignations constituted a threat and he would make the regulator’s letter public ‘when it’s time’.

Khazaradze and his deputy, Badri Japaridze, resigned from the London-based TBC Bank Group on 21 February, citing the ‘interest of the bank and its shareholders’. This happened a week after the National Bank demanded they take a step back from operations due to alleged financial violations by the two in 2007–2008.

Khazaradze, according to the same quote published by the Prosecutor’s Office, considered the authorities examining possible money laundering as an intention to tarnish his reputation, in order to jeopardise ‘financing for the Anaklia Port’.

Based on this, the Prosecutor’s Office indicated that Khazaradze did not mention ‘a letter with a threat from Gakharia’ in December.  

After Khazaradze’s questioning on 5 March, prosecutor Archil Tkeshelashvili said that the letter the banker had shared with them had no elements of identification and was a ‘regular printed paper anyone could produce’. The prosecutor also complained that Khazaradze refused to disclose identities of the ‘intermediaries’ he claimed had handed the letter from Gakharia to him.

Soon after Khazaradze’s statements to parliament, Gakharia called Khazaradze ‘a privileged businessman seeking immunity by gossiping’ in the parliament, and refuted the banker’s claim he had sent a threatening letter to him.

‘Privileges must end in business in this country once and for all. Blackmailing has to disappear from public politics entirely, and despite this blackmailing, everyone will be held responsible’, Gakharia told journalists on Monday.

‘Speculation’ about the Anaklia port

In his resignation statement on 21 February, Khazaradze said he would dedicate all his energy to the Anaklia Deep Sea Port project.

Attempts by the opposition European Georgia and United National Movement parties to invite Khazaradze before parliament did not materialise initially. A 26 February financial committee session ended abruptly after Georgian Dream MPs insisted against discussing the TBC bank case ‘openly’, citing the country’s financial stability.

The opposition groups requested Khazaradze appear in parliament to speak publicly about the deep-sea port project in Anaklia, which they said was in jeopardy due to the investigation. Since January, the opposition has claimed that ‘pressure’ on TBC from the authorities was related to Khazaradze’s conflict with the former prime minister and current head of Georgian Dream Bidzina Ivanishvili.

The opposition groups and several local media outlets indicated that the Anaklia Development Consortium’s winning bid for the project was the primary reason for the fallout between Giorgi Kvirikashvili, who became Georgia’s Prime Minister that year, and Ivanishvili, who was Prime Minister from 2012 to 2013.

The port, with a total investment value of $2.5 billion, is set to be developed by the Anaklia Development Consortium (owned by TBC Holding, another subsidiary of the TBC Bank Group) and US-based Conti Group LLC.

The consortium won the bid to develop Anaklia in 2015. UK-based international transport and logistics company Wondernet Express, American port operator SSA Marine, and Bulgarian G-Star are also involved in the Anaklia project.

The port is expected to start operations by the end of 2020.

Khazaradze made references to the Anaklia port project in a 14 February Facebook post, claiming that the National Bank’s ‘speedy ruling and deliberate campaign against’ them coincided with his bank’s bid to build the Anaklia port.

Two months after returning to formal politics in May 2018, Ivanishvili lashed out at TBC, accusing them and the Bank of Georgia of ‘eating up the whole country’. Ivanishvili’s comeback followed Kvirikashvili’s resignation from the prime-ministerial post, with both him and Ivanishvili citing disagreements over economic policies.