Major American investor leaves Anaklia Development Consortium
By Levan Abramishvili
Monday, August 19
According to the information, the Conti Group’s decision is due to the developments surrounding the Anaklia Port Project and, “in particular, the fact that no agreement has been reached between the government and the project investor banks so far, despite government officials’ rhetoric that they support the project and consortium.”
“The rhetoric remains just rhetoric: the group has not felt the support from the Georgian government for the project and thus made the decision,” an informed source told accent news.
“The project will not be in jeopardy,” said Mamuka Khazaradze, founder of TBC Bank and Anaklia Consortium.
Levan Akhvlediani, the CEO of the Anaklia Development Consortium, made comments with the media, noting that Conti Groups’ decision would not seriously damage the consortium. Akhvlediani said the issue has been in discussion for some time, with Conti Group making its final decision last week. According to him, The Conti Group has had a very passive role lately - in December 2018 they left the Supervisory Board and remained as shareholders.
However, Akhvlediani didn’t speak about the reasoning behind the decision.
“The official position of the company is that we are not going to disclose the reasons for the decision... we refrain. We have a specific way to go and we want to do it effectively. So we refrain from naming the reasons,” he said.
Elisabeth Rood, the US Charge d'Affaires, made comments regarding the decision of the American company.
“The United States continues to believe that the Anaklia Port Project is a very important project for Georgia’s economic development and the fulfillment of its potential as a trade and transportation hub. We continue to believe that this project should be completed with American investment because this can be a very strong strategic partnership between the United States and Georgia in the economic sphere,” said the Charge d'Affaires.
The Ministry of Regional Development and Infrastructure of Georgia has also responded to Conti Group’s decision with a special statement.
“To portray the situation as if after the exit of the Conti Group, the Georgian side of the consortium will successfully build the Anaklia Port, is not true,” reads the statement published by the Ministry.
According to the Ministry, Conti Group was the only company in the Consortium that complied with the tender requirements that were published in August of 2014.
According to the terms of the tender, the Georgian Government would rely on the bidding company to fulfill the project, if they meet two basic requirements: It would have had at least 5 years of experience in the construction and management of a similar port and the financial standing required to carry out such a project.
“The only company from the Anaklia Development Consortium to meet the tender requirements announced by the Georgian Government was the American company Conti Group. Accordingly, the Conti Group's participation in the Consortium was determinant for Anaklia Development Consortium to become the winning bid,” reads the statement.
Therefore, the Ministry urges the Consortium to introduce a plan of replacing the Conti Group with another Western company with similar capacities.
“We call on the Anaklia Development Consortium to submit to the Government a timeline plan as soon as possible to replace the 42% share of the American company Conti Group with a Western strategic investor with relevant experience and financial position, as required by the tender,” reads the Ministry statement.
The government has been in talks with the largest international banks for months. 7 of 8 requirements of financial institutions are agreed upon – the issue of the State is the guarantor for the insurance of freight turnover remains unsolved. Government officials have repeatedly stressed the importance of the Anaklia Deep-Sea Port, but have repeatedly criticized the Consortium’s work.
Recently, TBC Group founders, Mamuka Khazaradze and Badri Japaridze have been accused of money laundering.
Khazaradze has stated on several occasions that recalling transactions that happened 11 years ago and baseless accusations are targeted against the Anaklia Port project. The Government views the process strictly within the justice framework, disregarding statements of several experts that persecution of Khazaradze and Japaridze would harm the future of the Anaklia port.
Earlier this month, Khazaradze and Japaridze announced that they would step down from the Anaklia Development Consortium’s Supervisory Board. Three new members have now been nominated to the board: R. Michael Cowgill, President of the American Chamber of Commerce in Georgia; Ted Jonas, Senior Counsel with the international law firm Dentons; and Jean-Patrick Voisin, President of Concorde Capital. The nominations are expected to be approved at the consortium’s meeting of shareholders scheduled for later this month.
“Mamuka and Badri have provided great leadership to Anaklia Development Consortium, as its Chairman and Vice-Chairman,” said Levan Akhvlediani, CEO of the consortium. “However, in view of the legal proceedings initiated against them, which are legally unrelated to ADC or the Anaklia Port development project, Mr. Khazaradze and Mr. Japaridze have taken the initiative of resigning from the Board in order to isolate the ADC from any possible adverse consequences that could result from these legal proceedings,” he stated.
Mamuka Khazaradze, the outgoing board chairman, stated: “This project is much bigger than me and Badri. It is vital that any issues about the two of us, regardless of how unjustified or unfair they are, not negatively impact the Anaklia Port project. We will therefore not only remove ourselves from the board but also put our shares, into a secure, international blind trust structure, for as long as needed to fight the wrongful allegations made against us and fully clear our names.”
Consortium currently consists of TBC Holding from Georgia, SSA Marine from the United States, British Wondernet Express working in Central Asia, and G-Star Ltd. from Bulgaria.