Clearing Ivanishvili’s debt by infringement of investors’ rights
05 July, 2012
Clearing Ivanishvili’s debt by infringement of investors’ rights

The seized 100% of Cartu Group of Georgian political tycoon Bidzina Ivanishvili including the 100% of Cartu Bank within itself together with 21.7% of Progress Bank allegedly held by Ivanishvili are put on electronic auction to pay off the multi million worth fine of Ivanishvili. Cartu claims its property arrest and auctioning is illegal and violation of rights of honest investors for not a single of Cartu share belongs to Ivanishvili and several foreign companies are the stakeholders.

To force

Ivanishvili pay the penalty of GEL 74 325 065 imposed by court in this past June for alleged breakage of law on Party Financing based on allegations of Control Chamber of Georgia (CCG) authorities try through legally wrapped auction of shares imputed to be held by Ivanishvili in Cartu Group and Progress Bank just a week after the questioned property arrest imposed on June 26, 2012.
Ivanishvili refuses to pay the penalty as far as he believes the court proceedings were unfair and non-governmental watchdogs upheld his standpoint. To prompt Ivanishvili to pay the fine authorities pressed on business keys.
On June 21 the National Bureau of Enforcement (NBE) seized the property of Global TV, owned by Ivanishvili’s brother under the suspicion of vote-bribing in favor of Ivanishvili’s political party Georgian Dream. And since Ivanishvili did not change position the NBE arrested property of Cartu Group [where Ivanishvili used to be a beneficiary owner until May of 2012] as well as Ivanishvili’s shares at Progress Bank.
Actually 30 days should be given to the offender as a reasonable timeline to pay off the penalty and lift the property arrest, however NBE did not wait that long. It managed to implement the seized property assessment within a week at Samkharauli expertise bureau and put the questioned property for sale through e-auction on July 2, 2012 with the starting price GEL 75. 940 330 for 100% for Cartu Group [incorporating 100% of Cartu Bank within itself and put on auction as one lot] and GEL 1.783 249 for 21.7% for Progress Bank. 
The auction deadline is July 10, 2012 however no bidder turned out as of yet. The NBE informs the auction will be stopped immediately and the arrest lifted if Ivanishvili clears the debt.
Ivanishvili remains firm in his refusal. He is not going to pay money for the seized property that does not belong to him anymore. According to Archil Kbilashvili, a lawyer of Ivanishvili, Ivanishvili really has a stake at Progress Banks and its arrest and auction is in line with the law, but property seizure of Cartu Group and Cartu Bank are illegal for Ivanishvili does not hold a single share there at the moment. Besides he acted just as a beneficiary owner of the questioned company before and based on Georgian law no company is a subject to arrest to pay its beneficiary owners arrears.
“Beneficiary owner is beyond Georgian jurisdiction, it means that such legal entity is registered abroad and Georgian jurisdiction cannot cover it. Ivanishvili has many other companies abroad and as you cannot arrest their property to raise the penalty similarly you cannot arrest Cartu for its beneficiary owner’s debt, that’s not legal,” Kbilahsvili said in the interview with Georgian Journal.
Moreover, Ivanishvili is not a beneficiary owner at either Cartu Group or Cartu Bank since this past May. He handed his beneficiary ownership in the Bank to his eldest adult son Uta Ivanishvili and according to law, nobody can arrest property of another beneficiary owner even if he is a son of the indebted person.
However National Bank of Georgia (NBG) declared the hand-over deal annulled. It claims the deal was turned out unaware of the NBG that is illegal and therefore dissolved automatically.  According to the NBG official statement, it learned from the National Bureau Enforcement that 6 other companies appear beneficiary owners of Cartu Bank instead of Ivanishvili while this kind of change requires the NBG consent.
“In this concrete case neither the acquirer of important share nor the seller appealed the NBG accordingly, based on the law the deal is considered as imperatively void,” the NBG informed GJ.
“The NBG lies,” Kbilashvili counters. “The beneficiary owner is Uta Ivanishvili and not 6 companies as the NBG informs. Uta owns shares at those 6 companies as a beneficiary and Cartu Bank informed of this change the NBG on April 30. The hand-over was completed by May 2 to Uta abroad.”
Nodar Javakhishvili, Head of Cartu Group and Director General of Cartu Bank nicknamed the auction as a farce staged by the state to pocket Ivanishvili’s property. According to him, any potential bidder needs the NBG consent for Cartu Group includes 100% of Cartu Bank, while getting this consent is impossible in frames of electronic auction where bids are made covertly.
“That means if a bidder wins the package of Cartu Group it will be a priori annulled and the questioned property handed to the state that is the actual purpose of the authorities and not paying off the debt,” He said.
Secondly, Javakhishvili questions authenticity of the expertise as he finds impossible to assess assets of such a big company as Cartu Group within the less than a month while Samkharauli handled with the task in a week having assessed Cartu Group at GEL 151 880 661 and Progress Bank at GEL 3 566 498.
Besides, Javakhishvili reiterates that Ivanishvili is no longer owner of Cartu Group as eleven foreign companies acquired 91.74% of Cartu Group by end of this past April. He accentuates each of them owns less than 10% [a significant share benchmark by Georgian law, acquisition of 10% and more demands the NBG consent] and bears no responsibility to ask for the NBG consent and the latter cannot make the deal void.
He appeals Georgian authority to get back to legal framework and stop illegal expropriation procedure of foreign citizens’ property.


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