An investigation launched against the founders of TBC Bank raise many questions

An investigation launched by the Prosecutor’s Office against Mamuka Khazaradze and Badri Japaridze, the founders of TBC Bank, on a case of alleged money laundering together with other crimes that could be committed 10 years ago and disinformation campaign allegedly orchestrated by the ruling party-backed sponsored social network pages created a logical assumption that the mentioned investigation could be biased.

This assumption was further supported by a letter of the National Bank of Georgia sent to TBC Bank on 14 February. The National Bank of Georgia required from the shareholders of TBC Bank to dismiss the Chairperson (Mamuka Khazaradze) and Deputy Chairperson (Badri Japaridze) of the Supervisory Board of the bank. This request seems to be strange when the abovementioned investigation is still ongoing and the founders of TBC Bank have not proved to be guilty. After publication of the mentioned letter of the National Bank of Georgia the prices of TBC Bank’s stocks, which are listed at London Stock Exchange, dropped by 6.6%.

The above-mentioned processes can be motivated by business or/and political interests. In both cases, the main concern is over the building of Anaklia deep sea port by TBC Holding. This project has both economic and political value for Georgia. This is the largest and most important project that is developed by this business group.

Mamuka Khazaradze also linked the ongoing investigation against him to the issue of Anaklia port. On 14 February, he wrote the following in his Facebook post: “Another issue that raises questions is that such a hasty decision and ongoing disinformation campaign against us are made during a period when we are very close to successful implementation of Anaklia Port – a very important project for our country.”

On 22 January 2019, Ross Wilson, the US Ambassador (Chargé d’affaires) to Georgia, stated that he carefully followed the process against Mamuka Khazaradze and Badri Japaridze, because it could have a significant impact on Anaklia project. According to the Ambassador, his interest in this process also stems from the fact that US citizens own some shares of TBC Bank.

On 11 February, Pascal Meunier, the Ambassador of France to Georgia, also made a comment on this topic. He stated: “During the last months, certain negative signals have been coming from Georgia in terms of justice... developments around TBC Bank are strange … perhaps some wrongdoings were committed more than 10 years ago, but it is unexplainable for me why the mentioned issue became interesting now, after so many years and not earlier”.

Ben Hodges, the former head of the US armed forces in Europe, General-Lieutenant, and other analysts working on Caucasian region issues also underlined military and political importance of Anaklia port as a positive factor for Georgia’s security and integration into NATO an EU.

The EU also expressed its high interest in the development of Anaklia port. In the framework of Eastern Partnership, € 223 million will be spent for construction of Anaklia port.

Anaklia is adjacent to occupied territories of Abkhazia and this fact further increases its importance in terms of increased attractiveness of Georgia by improving human contacts and development of territories along the administrative border.

Georgia is situated on strategically important territory for One Belt One Road initiative since this is the shortest route connecting China and Europe. In addition, Georgia is a maritime country and this fact increases its transportation potential. However, at present, this potential is largely unrealized since we do not have a deep-sea port. Most of the high-tonnage ships swimming in the Black Sea cannot enter Georgian ports.

The project of Anaklia port focuses exactly on the increase of Georgia’s maritime-transportation potential. Anaklia Development Consortium obtained a right to implement this project through the process of tender. TBC Holding (Georgia), Conti International (USA), SSA Marine (USA), British Wondernet Express (Central Asia) and G-Star LTD (Bulgaria) are members of the consortium.

According to Anaklia Development Consortium, TBC Holding is a regional investment and development company, one of the members of which is TBC Bank, one of the largest Georgian banks. TBC Holding is a founder of Anaklia Development Consortium and primary partner and developer.

Anaklia will be the first deep-sea port in Georgia. The first phase of the port is supposed to be completed in 2021. The port will be able to host ships from 2022. Anaklia port will be developed in 9 phases and total investments will amount to USD 2.5 billion. Therefore, this is the largest project ever implemented in Georgia. The port will be 16 meters deep, which will allow to host 10 000 TEU ships. The port can transmit 100 million tons of cargo annually. For instance, in 2017 Poti port transmitted only about 7 million tons of cargo.

Together with the construction of the port, TBC Holding is going to build Anaklia City on 2 000 hectares of land. Anaklia City will be a Special Economic Zone (SEZ) and, together with a deep sea port, is supposed to be a regional business hub and significant trade and logistic center.

The Government of Georgia (GoG) is making significant contributions to aid in the development of Anaklia Port. GoG committed to provide the newest road and rail connectivity to the port site. In addition, GoG spent GEL 60 million on resettlement program. The investment agreement signed between GoG and Anaklia Development Consortium is a 52-year concession according to the Build-Operate-Transfer (BOT) principle.

Anaklia Development Consortium won a tender for development of the port in 2016 when the Prime Minister was Giorgi Kvirikashvili, who expressed its support to the project. Last summer, when Bidzina Ivanishvili officially returned to politics, he harshly criticized Giorgi Kvirikashvili after he had to resign. Ivanishvili also criticized TBC Bank and blamed Mamuka Khazaradze for his ingratitude.

In such reality, when we see the actualization of 10 years old case by the Prosecutor’s Office against the management of Anaklia Development Consortium, it can decrease the Consortium’s ability to attract investments needed for the project. Moreover, such actions decrease confidence in the Georgian banking sector. The Government is incapable to justify why this case became relevant now and why it has not been investigated earlier. Therefore, legitimate questions raise whether this issue is politically motivated and the Prosecutor’s Office is used as a punishment tool by the Government.

We believe, it is important to proceed this issue without hampering work of TBC Bank and Anaklia Development Consortium. Moreover, the orchestrated attacks by the Government and their affiliate disinformation social network pages should be immediately stopped in order to avoid damaging state interests, hampering the development of the port of high economic and political importance and work of one of the leading Georgian banks. So many unanswered questions cast doubt on the impartialityof justice in Georgia.