Center Point Pledges To Be Good
21 March, 2013
Center Point Pledges To Be Good
Center Point Group, the largest Georgian developer company handing out its property under three-year-management right to Dexsus, regained its property back 10 months earlier than the contract expire date and pledges to handle all incomplete construction projects completely in a year and half. For premature call off of the contract, Center Point paid USD 1.5 million to Dexsus in compensation.
The biggest construction scandal of Georgia involving former senior public officials and their company Center Point Group (CPG) who based
on research of Transparency International Georgia (TI Georgia), a non-governmental watchdog, mishandled with the around USD 310 million of nearly 6200 customers paid for the construction of new houses and left them without promised apartments or reimbursement through an intricate financial pyramid largely known as Ponzi scheme by 2010, looks like going to the end after Prosecutors’ Office undertook the case based on claims of swindled clients and TI Georgia report. Whether or not this will be a happy end and to whom is still a questionable issue that depends on unbiased state investigation and good will of the culprit company to fulfill its obligations against frustrated clients having faced both financial and moral losses during the lingering construction projects. Whether or not they get contracted housing spaces and compensations alike or only alternative living spaces will very likely be a negotiation point between expecting house-owners and CPG recently regained all its property back from the management company Dexsus hired in September of 2010 for three-year management of CPG suspended projects so as to meet all obligations assumed by CPG against clients expecting apartments of CPG since 2008 when the company faced financial problems. However, Dexus rather aggravated than solved the problem extorting more money from the clients while completely ignoring their voice of protest. As a result, out of 30 projects only 8 projects are completed and 13 put under construction at the moment. Prosecutors’ Office plans to audit each suspicious project to find the money channeling and circulation scheme practiced by CPG that plaintiff sides claim to be a financial pyramid.
“I have looked through papers and to my account approximately GEL 4.5 million was paid in Krtsanisi project while works of GEL 1.5 million are completed there and the project lays without conservation exposed to rain and sun. While Dexsus tried to feed us by promises to construct alternative much cheaper apartments,” Merab Gabuchia, an expecting house-owner of CPG told Georgian Journal. “The audits of Prosecutors’ office will scrutinize everything more precisely I hope as this is a criminal case. There are evidences that money we paid on our projects went to finance other projects.” Once legal persecution started CPG very likely decided to take control over the situation at its hands and dissolved the contract with Dexsus on March 4, 2013. As official excuse Maia Rcheulishvili, the top CPG figure, named incorrect approach of Dexus to clientele.
“I gave 30 thousand square meters of the constructed space to Dexsus with the promise to redistribute it among clients who already cleared the payment for apartments but they did not. I handed the project to Dexsus because we needed USD 40 million to fulfill financing sources that we could not raise from clients timely due to loose payment terms: they might make money-installments within 3 months that baffled us to collect due financial resources in time,” Maia Rcheulishvili, said in the interview to GJ. Now Rcheulishvili plans to raise money through banks that have stricter payment deadline. On her side, Rcheulishvili pledges to meet each problematic client to discuss the issue properly and complete all projects within a year and a half. She insists that the number of victim clients is only 705 not 6200 as Dexsus and TI Georgia statistics say. Victim clients assure the number exceeds 6 thousand in fact but CPG tries to disseminate real number from incomplete projects to alternative completed but cheaper projects so as to avoid legal pursuits, audits and perhaps huge compensations that may pop up in result of audits.
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