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TBC bank founder and Georgian opposition leader found guilty of fraud

12 January 2022
Mamuka Khazaradze. Photo: Mariam Nikuradze/OC media.

Mamuka Khazaradze, one of the founders of TBC Bank and the leader of the Lelo Party, has been found guilty of fraud but spared jail by Tbilisi City Court.

Khazaradze, along with TBC co-founder Badri Japaridze and businessman Avtandil Tsereteli were each given seven years in prison, however, their sentences were commuted as the statute of limitations for fraud had expired.

All three were on trial for the more serious offence of money laundering, but the court re-qualified the charges to fraud at the last moment.

The charges revolved around transactions of $17 million made in 2008, when Khazaradze was the chair of TBC’s supervisory board and Japaridze was the deputy chair.

An investigation was not launched until August 2018, and in July of the following year, they were charged.

[Read on OC Media: TBC Bank founder Khazaradze charged with money laundering]

According to prosecutors, in April and May 2008, TBC Bank loaned almost $17 million to two companies owned by Avtandil Tsereteli — Samgori Trade and Samgori M. On the same days the loans were issued, the companies transferred equal sums of money into the personal accounts of Khazaradze and Japaridze.

Khazaradze and Japaridze have both admitted to the transactions but insisted the money was a loan by the companies, and that they were above board.

Khazaradze said the money was then reinvested into TBC, as the bank was in danger of bankruptcy at the time.

Khazaradze and Japaridze have both vowed to appeal the verdict. ‘No crime was committed. There is no sign of crime’, Japaridze said on Wednesday.

Mamuka Khazaradze and Badri Japaridze at the Tbilisi City Court. Photo: Mamuka Khazaradze's Facebook page.

Wednesday’s ruling means the three have been released from all bail restrictions, including a ban on leaving the country.

A politically motivated case?

Throughout the investigation and the trial, the three defendants have insisted that the case was politically motivated.

Khazaradze and Japaridze did not enter politics until after the charges against them, launching the Lelo Party in 2019. 

However, the two, along with TBC, were heavily involved in the Anaklia Deep Sea Port project on Georgia’s Black Sea coast, a project that Georgian Dream founder Bidzina Ivanishvili was widely reported to have been unhappy with.

A rival port project in Poti has been linked to Ivanishvili.

[Read on OC Media: Anaklia row reemerges after leak shows Ivanishvili link to rival port]

A day before the verdict, Khazaradze claimed that Ivanishvili, who holds no official position,  had reached out to him, ‘probably, last year’, to ‘settle’ the case. He said he had refused to negotiate with Ivanishvili on the matter.

The third person charged in the case, Avtandil Tsereteli, is the father of Vakhtang Tsereteli, the owner of TV Pirveli, a channel that has been highly critical of the government.

While speaking before Parliament’s Budget and Finance Commission in March 2019, Khazaradze claimed to have received a threatening letter shortly before the investigation was launched from the then Interior Minister, Giorgi Gakharia, over TV Pirveli’s coverage.

He said that in the letter, sent prior to the second round of the 2018 presidential elections, Gakharia demanded that TV Pirveli adopt an editorial policy similar to that of Imedi, a channel that has openly committed to preventing the formerly ruling United National Movement Party from coming back to power.

An investigation including by independent experts in London into the authenticity of the letter, which Khazaradze said was handed to him by an intermediary, was inconclusive.

The government has repeatedly denied that the case was politically motivated, insisting that no one was above the law.

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