Co-Owners Fight for Control of Debt-Ridden Maestro TV

Tbilisi-based Maestro TV, no stranger to disputes between co-owners and management or journalists and management, has now became embroiled in a battle between shareholders involving several court disputes, redistribution of shares and sacking of a top manager, accompanied by allegations of possible political meddling, fueled by a meeting between Maestro TV majority shareholder and his “friend” PM Giorgi Kvirikashvili.

Three days after becoming a majority shareholder in Maestro TV, Giorgi Gachechiladze convened a meeting of shareholders on February 4 and sacked director of the channel Baia Gadabadze, who, backed by some minority shareholders, has disputed the decision. Gadabadze was replaced by Giorgi Gachechiladze’ brother, Levan.

Giorgi Gachechiladze, a singer with a nickname Ucnobi (unknown), was one of the key figures behind opposition’s lengthy street protest rallies in 2009 through his reality show on Maestro TV; Gadabadze was a producer of that show at the time. Giorgi Gachechiladze’s brother, Levan, was united opposition’s candidate in 2008 early presidential elections, who was defeated in the race by Mikheil Saakashvili.

Giorgi Gachechiladze became holder of 50% of Maestro TV shares in spring, 2011. Shortly after that he transferred half of his shares to his friend and distant relative Maka Asatiani, whose husband Kote Gogelia, a wealthy businessman with businesses in Russia, became the financial backer of the TV channel. Remaining 50% of shares were distributed among four other co-owners.

In autumn, 2015 Maestro TV launched bankruptcy proceedings in court, challenged by Giorgi Gachechiladze. 

According to Gadabadze, an audit estimated Maestro TV’s debt at GEL 54 million as of December, 2015 with Maka Asatiani being the largest creditor.

But Gachechiladze argues that these estimations are overinflated. His lawyer claimed that bankruptcy proceedings were initiated with Asatiani’s backing to make Maestro TV “go under the hammer”.

In TV ratings Maestro trails far behind the two leading private broadcasters – Rustavi 2 and Imedi TV. Maestro TV reported GEL 3.53 million in ad revenues in 2015, far less than Rustavi 2 TV’s GEL 37 million and Imedi TV’s GEL 23.67 million in the same year.

In late January Giorgi Gachechiladze agreed with two co-owners – Giorgi Ebralidze and Levan Chikvaidze, to buy their shares, 15% from each, for an undisclosed sum in a deal finalized on February 1. As a result Gachechiladze became 55% shareholder of Maestro TV.

Giorgi Gachechiladze says that money for acquisition came as a loan from Irakli Rukhadze, who has long been a manager of late tycoon Badri Patarkatsishvili’s assets and who remains affiliated with Patarkatsishvili family. Tbilisi-based Imedi television station is owned by the Patarkatsishvili family. Rukhadze has not yet commented on the deal.

“Maestro TV has a multi-million debt and from the commercial point of view it was absolutely unprofitable to pay large amount of sum for buying shares in such a company,” Gadabadze said, suggesting that politics not business interests are apparently behind this deal.

A meeting between Giorgi Gachechiladze and PM Giorgi Kvirikashvili in the government’s office on February 2, which was first reported by the Maestro TV and then confirmed by both Gachechiladze and Kvirikashvili, further fueled allegations over possible political meddling.

Both Gachechiladze and PM Kvirikashvili tried to downplay it as a meeting between old friends, which had nothing to do with Maestro TV.

“I had a meeting with my friend; it had absolutely nothing to do with Maestro. I will not comment further on that,” PM Kvirikashvili told journalists on February 5.

“I believe that the government is meddling in [this dispute],” Baia Gadabadze told Maestro TV’s talk show late on February 5.

As of now Gadabadze remains in control of the TV channel’s management as registration of her dismissal from director’s position and appointment of a new director has not yet been finalized by the Public Registry – the process is expected to be completed early next week.

Gadabadze said that on Monday, when the Public Registry is expected to finalize registration of her dismissal and Levan Gachechiladze’s appointment as a new director of TV channel, she plans to make public certain documents, which will “provide answers over many issues” – she declined to elaborate.

Levan Gachechiladze told journalist on February 4 that neither he nor his brother has any political motives and the only goal is to make Maestro TV the most-watched television channel in Georgia and to “outrun” Rustavi 2 TV in ratings.

Maestro TV’s newsroom said in a written statement that the channels editorial independence has always been guaranteed including under leadership of Baia Gadabadze. “We hope that this situation will not change in the future and Maestro will not lose what made it a comfortable space for its employees,” reads the statement.

In parallel a separate dispute is ongoing between Giorgi Gachechiladze and Maestro TV’s founder and holder of its 15% shares Mamuka Glonti.

Glonti argues that Gachechiladze broke preliminary deal according to which he should have given up his 25% shares, which he obtained in 2011, in favor of other co-owners by late 2012.

“I do not dispute legality of 30% which Gachechiladze obtained just recently… But we, some co-owners, believe that he holds 25% of shares illegally… I have filed a lawsuit in the court over this issue a month ago,” Mamuka Glonti said in an interview with the daily newspaper Rezonansi.

A separate dispute involves ownership rights over Maestro TV’s logo, which Gachechiladze argues was illegally transferred to Bacho Kikabidze, a former director of Maestro TV.

Kikabidze announced on February 5 about the intention to launch a new TV station “Maestro-24”. The channel is already available on airwave, but it currently only rebroadcasts Maestro FM radio station and runs a still image of a logo, which is similar to the one of Maestro TV with only difference that it adds “24”.

“It’s easy as never before in Georgia to launch a TV channel,” Bacho Kikabidze said on February 5, adding that he is currently busy with fundraising to secure operation of the new channel.

But this move may also become a source of new dispute as holder of the frequency where Maestro 24 is now available is Maestro TV, where Gachechiladze is a majority shareholder. The Georgian National Communications Commission (GNCC) notified Kikabidze about the need to provide GNCC with all the relevant information, including programming schedule, as envisaged by the law. Kikabidze said that he will file necessary documents with GNCC next week.

A group of civil society organization expressed concern in a statement on February 4 that although it is a private dispute, developments over the TV channel are “politically motivated.”

“These unexpected developments only a few months before the Parliamentary elections [in October, 2016] in Georgia are alarming,” reads the statement. “The case of Maestro intensifies doubts of civil society that the government wants to establish control over media prior to elections. In the summer of 2015 similar events occurred around ownership of TV company Rustavi 2. The private dispute there also bore political undertones. It is vital that the owners of the controlling stake do not take hasty decisions to fire management or staff and wait until the case is resolved by the court. This would be a sign that their aim is to develop the company rather than hinder its operation or limit editorial independence.”