WSJ: UK Looking into Rustavi-based Steel Mill Dispute

UK officials are looking into claims by a British investment company, Thames Steel UK Ltd., that its steel mill in Rustavi was seized and sold off by Georgian court, The Wall Street Journal reported on November 26.

“We are very much aware of the issues and we do continue to raise it at an official and ministerial level,” a spokesman for the UK Foreign and Commonwealth Office was quoted by WSJ.

The British officials are expected to raise the issue with Georgian PM Nika Gilauri who is visiting London to promote Georgia among British investors, according to this report.

The issue involves claim by Thomas Blake, a director at Thames Steel UK Ltd., that the plant in Rustavi, was essentially given away by Georgia’s courts. According to WSJ, Blake says that Thames Steel UK Ltd. bought Energy & Industry Complex, a holding company which owns Rustavi-based Georgian Steel, from late tycoon Badri Patarkatsishvili for USD 70 million in September 2007. He also says that in September, 2009 he discovered an enforcement process was under way to transfer the plant to a creditor called Kolkhis Business Corp. He says that he failed to find any records for Kolkhis Business Corp. and believes that this firm was created to make the transfer claim. Blake also told WSJ that in October, after a failure to auction the mill, it was passed to Kolkhis Business Corp.

The Georgian media sources were reporting in October, that the Rustavi-based plant’s management was denying Blake’s claims saying that the Georgian Steel was in charge of the plant’s management – the company owned by Energy & Industry Complex, which according to the management, was wholly owned by Joseph Kay, a relative of late tycoon Badri Patarkatsishvili. Kay was a key figure in a controversial deal involving Imedi TV station, ownership of which is now disputed by Patarkatsishvili’s family.

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