Verdict in Rustavi 2 TV Ownership Dispute Expected Today

A judge of Tbilisi City Court, presiding over Rustavi 2 TV ownership dispute case, said he will deliver the verdict later on Tuesday afternoon. 

After listening to parties’ final oral arguments, judge Tamaz Urtmelidze said that he will announce his verdict at 5:30pm local time.

One of the former majority shareholders of Rustavi 2 TV, Kibar Khalvashi, who owned the broadcaster in 2004-2006, filed the lawsuit seeking reclaiming his shares in August.

As an interim measure court ordered in August to freeze Rustavi 2 TV assets, which was followed less than two months later with an additional court injunction, which froze assets of Rustavi 2 TV shareholder company.

The lawsuit was condemned by Rustavi 2 TV and many opposition parties, with UNM being the most vocal among them, as government’s attempt to seize the most-watched Georgian broadcaster, which is a fierce critic of government’s policies.

In his lawsuit Khalvashi has claimed that he was coerced into selling of the television channel by then leadership of the country in 2006, including by then president Mikheil Saakashvili.

As a piece of evidence, his lawyers presented in court a report on valuation of Rustavi 2 TV shares in 2005-2006 through which the plaintiff claimed that the price for which he had to sell his shares were in fact far lower than actual value of the assets; through this piece of evidence Khalvashi tried to prove that he would not have sold the broadcaster for the stated price without having been pressured into it.

The valuation, commissioned by the plaintiff, was done by an expert from the Georgian State Forensics Bureau, based on inconclusive financial data provided by the plaintiff. The valuation was done through an asset-based approach as it was more relevant in the condition of scarce financial data, the expert, who was the only witness summoned for questioning during the proceedings, told the court on October 28. The expert, who compiled the report in September in less than two days, also said that he had not verified authenticity of the provided data as it was not within his competence.

Lawyers representing Rustavi 2 TV and its current majority shareholders sought in vain to exclude the report as invalid evidence on the grounds that it was based on dubious and inconclusive financial data; they also argued that the report was not compiled based on the international valuation standards. The motion was rejected by the judge. Paata Salia, a lawyer representing the plaintiff, said that the respondents failed to provide arguments to back their claims that the report was based on fake financial data and argued that the respondents also have burden of proof to substantiate their claims.

Since mid-September, when the court hearing started, respondents filed for multiple times motions requesting judge Tamaz Urtmelidze’s recusal on the grounds of his “bias” in favor of the plaintiff and on the grounds of government having levers to exert influence on him through a criminal proceedings, which were launched against judge’s mother in connection to a domestic incident that occurred more than a year and nine months ago. All those motions for recusal were rejected by the judge.

The judge was frequently accused by Rustavi 2 TV head, Nika Gvaramia, of being “corrupt” and a stooge of ex-PM Bidzina Ivanishvili. After the judge ordered one the court injunctions, Gvaramia said that “soil will burn under judge Urtmelidze’s feet” and “he will never find a safe haven in this country.” After one of the verbal exchanges with the judge, Gvaramia was ordered to leave the courtroom on October 19 and has not been allowed to attend the hearings since then.

“I have never had to deal with such an absurd case,” Zaza Bibilashvili, representing current majority shareholders of Rustavi 2 TV told the judge.

“There is nothing in this case except of Khalvashi’s allegations and two pages printed out from his computer,” said Bibilashvili, who is also a member of the opposition UNM party’s political council. “The verdict in favor of the plaintiff would be unheard of illegality.”

Lawyers representing Rustavi 2 TV were telling the judge not to yield to government pressure and not to rule in favor of the plaintiff.

Paata Salia, a lawyer representing plaintiff Kibar Khalvashi, said that the respondents were trying to “politicize” the dispute throughout the court proceedings.

“This [lawsuit of Khalvashi] is not against Rustavi 2 TV, neither has it aimed at restricting media freedom or at obstructing Rustavi 2 TV operations,” Salia said. “Respondents’ arguments were politically-charged and I am not going to respond to their political statements… I don’t think the courtroom is the right place for this.”

91% of shares in Rustavi 2 TV, which now earns more in advertisement revenue than several of its main competitors combined, are currently owned, directly and indirectly, by Levan Karamanishvili and Giorgi Karamanishvili, little-known figures to wider public in Georgia who are believed to be close associates of former President Mikheil Saakashvili.

Since 2004 the television station has changed hands multiple times and most of those changes in its ownership structure were intertwined with politics, creating complex web of controversial deals and multitude of former owners of which Khalvashi is not the only one who now wants to reclaim the broadcaster. As the channel was passing from one owner to another, every new shareholder was either an ally of then president Mikheil Saakashvili or an obscure offshore firm.

Respondents also argue that current owners of 91% shares of Rustavi 2 TV – Levan Karamanishvili and Giorgi Karamanishvili, are bona fide holders of the broadcaster.

After Khalvashi sold his shares in Rustavi 2 TV and before Giorgi and Levan Karamanishvili became the shareholders, the ownership of the broadcaster changed for multiple times; for years majority of shares was owned by offshore registered companies with beneficiary owners unknown. Khalvashi claims that Saakashvili controls the broadcaster through Giorgi and Levan Karamanishvili, who, he says, are nominal shareholders.

Lawyer representing Khalvashi, Paata Salia, said that the respondents failed to present any evidence, except of printouts from publicly registry of ownership structure, to prove that current owners are bona fide shareholders.

Rustavi 2 TV lawyers wanted to involve in the litigation as a third party previous shareholders of the Rustavi 2 from which current owners bought shares, but the motion was rejected by the judge.

Verdict by the Tbilisi City Court can be appealed.