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Prosecutors Say New Evidence against Okruashvili Emerges

The General Prosecutor?s Office said on October 3 it had obtained new evidence, indicating that USD 205,000 of Ministry of Defense (MoD) funds had been embezzled through illegal transactions on the procurement of fuel while Irakli Okruashvili served as Defense Minister last year.


Nika Gvaramia, the deputy chief prosecutor, said that the case involves ?an illegal contract? which was signed between Iason Chikhladze, the ex-chief of the MoD?s procurement unit, and an offshore-registered (British Virgin Islands) company, AG Transport and Development, on June 27, 2006. The supply of 4,000 tons of aviation fuel from Turkmenistan for USD 2.9 million was agreed upon.


?The price of the fuel, according to the contract, was set at USD 725.7 per ton, while the market price of fuel at the time was USD 671. 2 per ton,? Gvaramia said. ?It should be stressed that the MoD already had a contractor, AviaSatsvavServisi Ltd., which was supplying fuel from Turkmenistan at less than USD 675 per ton. Hence, there wasn’t even a need for a new contract with a new company.?


Gvaramia said that Irakli Okruashvili?s close friend, businessman Kibar Khalvashi, was behind the offshore-registered AG Transport and Development, with Davit Velijanashvili, chief of Khalvashi?s security detail, personally charged with ensuring the supply of fuel.


One of the charges brought against Okruashvili shortly after his arrest on September 27 also allegedly involves Khalvashi.


In January 2005, according to the General Prosecutor?s Office, Okruashvili, who was at that time the defense minister, suggested that Khalvashi set up a construction company, International Building Company. The company eventually became ?the exclusive contractor? for the Defense Ministry in construction projects worth GEL 140 million, according to the General Prosecutor?s Office.


Okruashvili denies the allegations, saying they are politically motivated. He claims he is a political prisoner.

Before Okruashvili?s arrest, the Revenue Service started a tax audit of ARTI Group, a distributor company for Procter&Gamble, Gillette, Wella and other companies, which is owned by Kibar Khalvashi. Company executives said recently that there was no grounds for an audit as the company had always been ?an honest taxpayer.?


Khalvashi owned the Tbilisi-based Rustavi 2 television station when Okruashvili was in government. He sold up, however, shortly after Okruashvili quit the government in November 2006.

This post is also available in: ქართული (Georgian) Русский (Russian)

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