TBC, National Bank Reach Deal in Dispute

TBC Bank and the National Bank of Georgia (NBG) have reached a deal over a disputed 2008 transaction, with TBC Bank agreeing to withdraw its lawsuits against the regulator and pay a GEL 1 million fine. The banks issued a joint statement today, shortly after the Chairman of the Supervisory Board of TBC Bank, Mamuka Khazaradze, announced his resignation.

TBC Bank said it takes into account the possible risks to the country’s investment climate and respects the role of the National Bank “as a qualified regulator,” and although NBG’s decisions were challenged in the court, the TBC will implement the Supervisory Board reform, with a view to removing the founding stakeholders from the board.

The bank said the decision will apply to the chairman and the deputy chairman of the Supervisory Board, Mamuka Khazaradze and Badri Japaridze, respectively. The two will, however, keep their positions at TBC’s UK-based parent company TBC Bank Group PLC, where Khazaradze is the chairman of the Board of Directors, and Japaridze is a deputy chairman.

To “avoid questions from any third party regarding corporate governance,” the bank went on, TBC PLC will hire a reputable international company for inspecting its conflict of interest transactions, practices and procedures.

The National Bank, on its part, said it welcomes the decision, and believes that it will contribute positively to TBC’s transparency and will increase investor confidence, “which will ultimately have a positive effect on the development of the Bank and the country’s financial sector.”

The NBG also underlined that TBC “is one of the leading financial institutions in the country and in the region and is led by a highly qualified executive management team and independent members of the Supervisory board.” “TBC Bank is a strong and stable credit institution and fully complies with economic normative requirements and limits set by the National Bank,” it also noted.

“With that, the issue is settled from both sides, and we call on all parties to refrain from speculating on the matter,” the regulator concluded.

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