Another Victim of Rose Game?
02 August, 2012
Another Victim of Rose Game?

Cartu Bank, which have been imputed with political tycoon Bidzina Ivanishvili, is supposed to fall another victim bank going bankrupt due to political game of the Rose Revolution government.

Nodar Javakhishvili, President of Cartu Bank, accuses the forced regime management assigned by court at Cartu on July 12, 2012, in deliberate destruction of the bank  leading Cartu to liquidity problems that unties hands to the National Bank of Georgia (NBG) to assign temporary administration there and Cartu may share the fate

of Standard Bank [owned by the late politician tycoon Badri Patarkatsishvili] going bankrupt and sold out in 2007 after Patarkatsishvili entered politics as an opposition.

The NBG assigned a temporary administration at the Standard Bank, arrested its accounts and led the Bank to bankruptcy.  Giorgi Kadagidze, the incumbent President of the NBG, was the head of that temporary administration at Standard Bank and Irakli Zarkua [who was a board member of the recent forced management at Cartu] was also a member of temporary administration at Standard Bank in 2007. According to Javakhishvili,  Zarkua when leaving Cartu on July 26 after cancelation of the forced regime promised to get back in a fortnight and very likely he will.

New management did its best to destruct the Bank to bankruptcy during a week of administration in order to lay ground to the central bank to assign its temporary administration at Cartu, Javakhishvili as well as experts say.

“Consequently, Cartu faces liquidity problem that will be revealed by the NBG on August 10, when commercial banks are supposed to present their obligatory financial reports at central bank and the NBG will introduce a temporary administration at Cartu quite legally since the bank faces liquidity problems,” Lia Eliava, a financial analyst, said. “All will be done within legal frameworks. The state wins always and everywhere.”

Georgian financial analysts predicted Cartu bankruptcy was predefined as soon as the court decided to pass it to forced management on request of the National Bureau of Enforcement of Georgia (NBE) and Zarkua, a dexterous expert of bankruptcy affairs, stepped in as a board member.

“He did his task with success and was promoted into a counselor of Kadagidze in reward,” Javakhishvili said in the interview with Georgian Journal. “New management did everything to prepare a ground at the Bank that if there had been jeopardy to revoke the forced management regime they should have contrived to lay ground to introducing the temporary administration of the NBG under excuse of liquidity problem or any other kinds of diversion from norms.”

As soon as new management stepped in Cartu it initiated negotiations with European Bank for Reconstruction and Development (EBRD) on clearing the loan before the deadline while EBRD did not ask for anything. On the other hand, new managers undertook reconstruction of a branch-office in Telavi, Kakheti region, and contracted a company [imputed with Zurab Adeishvili, General prosecutor of Georgia] for GEL 800 thousand to this end while the questioned building was acquired for GEL 500 thousand. Neither track of accounts, nor a business plan or any other due paper-work proving reasonability of the deal is available. When Cartu employees protested complete transfer of the requested GEL 800 thousand the authorized managers issued a special act to transfer GEL 300 thousand in advance to the contracted company.  The gem of prowess of new management that dropped Cartu beyond the liquidity limit [fixed at 20% of attracted resources] was a USD 50 million worth loan contracts with 4 developer companies. Contracts with no collateral back-up, economic reason, and clear obligations on the side of the borrowers.

“As a matter of fact they failed to disburse this loan due to time limits but nevertheless this loan is put in the Bank’s obligations that catastrophically affects the liquidity limit that will be a direct ground to the NBG to enter at Cartu through temporary administration,” Javakhishvili said.

These fatal agreements were signed on July 24 when Ivanishvili paid penalty and the forced management [imposed on the Bank to impel Ivanishvili, a billionaire leader of oppositionist political coalition Georgian Dream and imputed owner of Cartu Group, to pay GEL74 325 065 penalty for alleged breakage of law on Party Financing] was to be canceled.

Ivanishvili waived the penalty claim as illegal. To press on him NBG seized 100% of Cartu Group including the 100% of Cartu Bank within itself as well as 21.7% held by Ivanishvili at Progress Bank but to no avail as Ivanishvili claimed he did not own Cartu Group any more as he handed his shares to other foreign investors by May of 2012 and therefore did not plan to pay for the property that does not belong to him. New stakeholders appealed Georgian authority not to infringe their rights.

Nevertheless, NBG put Cartu Group assets along with the Progress Bank shares at auction on July 2-10, 2012 but it failed and the questioned assets were passed to forced regime management on July 12 that was canceled on July 26 for Ivanishvili paid the requested money in the state budget on July 24 in the face of charity action to help the natural disaster-affected Kakheti region completely devastated by storm and hail on July 19.

Spokesperson of the ruling National Movement party claims the charity was a mere excuse for Ivanishvli who paid the penalty to save his actual property from bankruptcy. But not Cartu Bank. Its operation is suspended at the moment due to liquidity problems expecting for another bout of temporary administration that Javakhishvili expects will end up similar to Standard bank – bankruptcy and divesture. Cartu raised a lawsuit against new management team on unreasonable loan-contracts, however having experienced unfair court decisions, property arrest and auction, Javakhishvili does not believe the court will settle fairly. Besides the litigation process does not hamper the NBG to go ahead with temporary administration.

“New management did a crime in fact but do you believe in this court?” Javakhishvili asked. “Besides, until the court procedures are over  the temporary administration will handle with the Bank.”

 

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