The investigations service at the Finance Ministry, which is in charge of probing into financial wrongdoings, is investigating sale and then buying back of over four hectare plot of land in downtown Tbilisi by the capital city’s municipality several years ago, which the ministry suspects led to several millions of financial damage to the budget.
The case involves a plot of land of 43,350 square meters on Rike. Several former or current officials, who back in 2006 were members of the land management commission at the Tbilisi municipality, including now deputy Tbilisi mayor Papuna Petriashvili and former governor of Imereti region Lasha Makatsaria have already been questioned by the Finance Ministry’s investigations service.
The investigations service has also summoned for questioning Davit Sakvarelidze, who is now a lawmaker from the United National Movement (UNM) party; he was a member of the land management commission at the Tbilisi municipality in 2006.
MP Sakvarelidze, who is a former deputy chief prosecutor, said at a news conference on December 11 that the investigation by the Finance Ministry was “obscure” and “politically motivated”, which, he said, was ongoing against political opponents upon direct instructions from PM Bidzina Ivanishvili.
“Let them send me questions publicly and I am ready to answer any question publicly,” MP Sakvarelidze said, adding that he would not appear on questioning on December 12. “I won’t assist them in this political persecution and in this dirty process.”
This case of selling and then buying back of plot of land on Rike by the Tbilisi municipality came into spotlight in May, 2012 after Tbilisi-based watchdog group Georgian Young Lawyers’ Association (GYLA) released a voluminous report scrutinizing rehabilitation projects in Tbilisi, Kutaisi and Batumi.
One of the episodes of this report is about the Rike area in the capital city.
In June, 2006 the Tbilisi municipality sold a plot of land of 43,350 square meters on Rike for USD 7 million to Akhali Rike (New Rike), a company which was registered less than two months before the deal was signed.
The company was co-founded by GMC Holding which has diversified business interests in Georgia, among them it co-owns a firm managing chain of restaurants. GMC Holding is owned by an offshore entity, which at the time of Rike deal was represented by Levan Karamanishvili, who is now a co-owner of the Tbilisi-based Rustavi 2 television station.
In late 2008 the Tbilisi municipality bought back from the same company the same plot of land for USD 17 million, which, the GYLA said in its report, resulted into USD 10 million financial damage for the capital city’s budget.
The Finance Ministry says that at the time of buying plot of land on Rike, the company undertook a commitment to carry out various construction and development works on the area, but none of the commitment was fulfilled at the time when the Tbilisi municipality bought back the plot of land in late 2008.
Finance Minister, Nodar Khaduri, said on December 11 that there was nothing political in the ongoing investigation; he said the case was about “wasteful spending” of taxpayers’ money.
MP Giorgi Gabashvili of the UNM said that Khaduri’s these remarks, while the investigation was still ongoing, was “a slander, which aims at discrediting political opponents.”
Last week first deputy chairman of the Tbilisi City Council (Sakrebulo), Mamuka Akhvlediani of UNM, said that in order to have a full picture the investigation into the Rike case should also question PM Bidzina Ivanishvili.
Akhvlediani, who at the time of Rike deal in 2006 was chairman of Tbilisi’s land management commission, said that in 2006 the capital city’s municipality was in talks with Ivanishvili to provide funding for the development of the Rike area; at the time Ivanishvili was on good terms with President Saakashvili’s administration and was funding various government-backed projects as part of his charitable activity. Akhvlediani said that those talks failed to yield results because of a failure to agree on design of the project. He said that after Ivanishvili refused to provide funding, the Tbilisi municipality decided to buy back the plot of land and to develop the area on its own. Akhvlediani denied any wrongdoing in the process of the deal and expressed readiness to answer any question that the ongoing investigation might have. PM Ivanishvili said on December 9 that he was not clear for him why he should be questioned about this case, because he was only offered by the authorities to finance development of the Rike area, but refused as he did not like architectural design of the proposed project.