Georgian Chief Prosecutor’s Office releases new details on TBC case

The Prosecutor’s Office speaks about three former top TBC bankers who could have been involved in money laundering.Photo: Tabula., 28 Feb 2019 - 16:18, Tbilisi,Georgia

The Georgian Chief Prosecutor’s Office has released new details regarding the high profile money laundering case involving TBC Bank founders Mamuka Khazaradze and Badri Japaridze.

The office has “identified” a third former TBC figure who could have been involved in the possible transaction.

The Prosecutor’s Office stated that they decided to reveal the details as the public interest in the issue is high.

Khazaradze’s resignation came after the demand of the National Bank of Georgia, which called for the withdrawal of Khazaradze and Japaridze from the bank’s supervisory council. Photo: TBC Bank's press office. 

What does the Prosecutor’s Office say?

The Prosecutor’s Office repeated that they launched the investigation of the case on 2 August 2018, after the Georgian Financial Monitoring Service sent them a written note about the possible violation the day before.

In April-May 2008 the TBC Bank gave 17 million USD to LTDs Samgori M and Samgori Trade as a loan and on the same day the money was placed on the private bank accounts of Khazaradze and Japaridze,” the office said.

The Prosecutor’s Office stated that in October-November 2008, so that the companies even did not start covering the interest rate for the loan, they were given one more year to close the loan without providing any reasons.

However, in about a month, on 31 December 2008, the bank written off the debt without demanding the real estate had provided as the guarantee or paying the money by the guarantors,” the office says.

The Prosecutor’s Office claims that despite the step the bank continued to issue loans for the two LTDs.

In 2012 the Bank fully freed the LTDs from the financial obligations before the bank with the use of a special scheme.”

The Prosecutor’s Office says that the LTDs were replaced with a company registered in the offshore, which had no financial actives in Georgia.

Price of the stocks of TBC start increasing at the London Stock Exchange after Khazaradze's resignation. 

The company was created a month before the replacement took place,” the office says.

The Prosecutor’s Office stated that in parallel of the replacement of the companies, mortgage was remove on the real estate which had been provided as the guarantee for the loans.

It is noteworthy that the trustee for the company registered in the offshore was P.Gh, who was the member of the credit committee which issued loans on the LTDs and who took the top managerial post in the bank when the LTDs were replaced with the company,” the Prosecutor’s Office says.

The Prosecutor’s Office stated that the loans of the Samgori M and Samgori Trade were written off so that the companies have never paid for the loan service and the loans have never been returned back to the bank.

Who is the newly-emerged former top banker?

BPN says that Former Deputy Director General of the TBC Bank Paata Ghadzadze is the individual identified only as P.Gh by the Prosecutor’s Office.

The media reports that Ghadzadze took the post until 1 January 2019 and then left the top management of TBC.

TBC says the investigation is ‘absurd’

Khazaradze and Japaridze, who state that they were forced to leave the bank, claim that the investigation is an absurd, discrediting the bank and affecting the country’s economic image.

They say that the transaction in 2007-2008 took place with full compliance with the law and the leading financial institutions confirmed this in their audit.