The FINANCIAL -- Eristavi
Law Group, representing the interests of the former owners of Liberty
Bank, says that top officials from the previous government must be
prosecuted for divesting the Bank’s legal owners of it. Davit Eristavi,
Partner at Eristavi Law Group, believes that among the people who should
be taken to court are the current Governor and Chairman of the Board of
the National Bank of Georgia , Giorgi Goguadze, one of the shareholders
of Liberty Bank, Davit Karseladze, Head of the Financial Police
Investigations Department and Lado Gurgenidze, co-owner of Liberty Bank.
“An illegal act took place in which state agencies, the Financial Police, the Ministry of Internal Affairs and the National Bank were involved. It was not just an illegal act, but robbery,” said Davit Eristavi, Partner of Eristavi Law Group.
“If we do not find justice in this country we will bring this case to the European Court of Human Rights where we will win and Georgia will be forced to pay USD 150 million to the family, which is the worth of the Bank. Today we are facing an obstacle as the investigation has been interrupted; it has been stopped. We are told that the current government has made a deal with the accused side and that is why the case has not come to its logical conclusion. More than 200 people have been interrogated. The case has been investigated and nothing is hampering its logical end in reality. It needs about a month to be resolved. If justice is not restored to the family, serious questions about the new government will arise as well,” he added.
On the other hand the Financial Police Investigations Department told The FINANCIAL that the case has not been interrupted and that it has been getting carried out extensively since April 2013 when the Department received the case from the Prosecutor.
The first evidence of pressure started in 2008, according to Eristavi Law Group. The National Bank required from People’s Bank that it increase its authorized capital, when the minimum authorized capital is GEL 10 million and People’s Bank had authorized capital of GEL 53 million, according to Eristavi Law Group.
“At that time Giorgi Goguadze was running People’s Bank. He was telling the shareholders, including the Jincharadze family, that the National Bank requested People’s Bank to sell. At first the shareholders refused to sell the Bank but after receiving threatening phone-calls they decided to sell it and so brought Swiss Capital to Georgia to buy People’s Bank. Swiss Capital, which intended to pay USD 75 million for purchasing the Bank, was not allowed to buy it as the National Bank was not in agreement with the idea (when selling a bank the sides need to get permission from the National Bank). At that time Giorgi Goguadze already knew that by the next audit the Bank would be alienated, so he robbed it. He took USD 7 million from the Bank. This amount of money was the Bank’s property, which was owned by the shareholders. Goguadze transferred this amount to his relative, who transferred the money back to Goguadze’s account after a certain period of time had passed. By that time Lado Gurgenidze had already become Prime Minister of Georgia,” said Eristavi.
“The case shows that Interior Minister Vano Merabishvili was also involved in these processes. Goguadze said that Merabishvili was insisting that “one man” must become the General Director of People’s Bank. It was discovered that Merabishvili meant Giorgi Glonti, who was Vice President of the National Bank,” Eristavi said.
Giorgi Goguadze, son of former Vice-Speaker of the Georgian Parliament and former MP, is now seeking shelter in the European Union, as he fears for revenge from his former partners, a source told The FINANCIAL.
Glonti was appointed General Director of People’s Bank a month and a half before the Jincharadze family was divested of the Bank.
“After that the family was told that the Bank should be given to Euro Oil, a USD 1,000 company, based in London in 2007 and owning one supermarket there. Euro Oil bought People’s Bank for USD 10 million, while an estimated value of the Bank reached USD 125 million. It was found out that Euro Oil got money from New Energy, owned by Cezar Chocheli. After a year, Euro Oil sold its assets to Liberty Capital Group for just USD 15 million. People’s Bank was given a new name - Liberty Bank and new General Director - Lado Gurgenidze, then-Prime Minister,” said Eristavi.
Aleksandre Rtveladze, recently-appointed General Director of Liberty Bank, stated that Lado Gurgenidze already gave a detailed statement on this issue last year, and has nothing more to add.
The latest statement of Lado Gurgenidze relating to the issue reads: “When we purchased People’s Bank it was in the worst conditions. We made investments of USD 30 million in the last three years. Western investment groups invested GEL 11 million in the Bank. In total, its share capital has been increased by USD 41 million. We do not know the former owners of the Bank and we are not handling any negotiations with them”.
Nino Khurodze, Head of the Marketing Department of Liberty Bank, added that after arriving back in Georgia, Gurgenidze will make a statement again. “I still do not know whether he is going to appeal to court against all these accusations or not,” she said.
However, the National Bank states that the allegations are not true and banking sector representatives should recall the problems that People’s Bank was facing at that time. “The correct and timely policy of the National Bank supported the recovery process of People’s Bank. It was purchased by qualified investors and a professional management team. Today the Bank rightly occupies a place among the leading commercial banks,” The FINANCIAL was told by the National Bank.
In reply to the National Bank, Eristavi Law Group provided data which shows that People’s Bank owned property of GEL 318 million in 2008. ING, a global financial institution of Dutch origin, estimated People’s Bank at USD 120 million. The Bank owned more than 200 branches which were equipped to the full, had about 600,000 customers (1/3 of Georgia’s population). “The 16-floor building on Chavchavadze Avenue alone cost USD 35 million. People’s Bank was one of the biggest and strongest banks in Georgia in 2008. Therefore how could the National Bank say that People’s Bank had problems taking into consideration the indicators and conditions of the Bank at that time,” said Eristavi.
The Jincharadze family believes that the owners are planning on selling the bank to VTB Bank now, which will make it even harder for the investigation to reveal the truth. VTB Bank representatives say that this is false information and the Bank is not going to purchase Liberty Bank. “Negotiations haven’t even been held on this subject,” said Nino Bendeliani of VTB Bank.
Several months ago The FINANCIAL was told by a source close to Liberty Bank that Lado Gurgenidze had sold 80% of his shares, but the Bank’s officials did not confirm the sale. The source said that Oracle Capital Group, an independent multi-family office dedicated to providing personalized services to high net worth individuals, was involved in the purchase.
Today Liberty Bank is jointly owned by billionaire Dan Costache Patriciu with 70.70%, Vladimer Gurgenidze with 7.48% and BNY Limited (Nominees) with 11.27%, according to the reports published by National Bank of Georgia .
People’s Bank was founded in 2002. One of the founders was Mamuka Jincharadze, who was murdered in MOSCOW in 2005. The shareholders were Giorgi Goguadze (9.59%), Irina Jincharadze (24.88%), Starcord Resources Ltd (20.18%), Elene Kovalenko (20.18%) and other smaller shareholders.