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British Lawyer: Khazaradze, Japaridze ‘Face Highly Unusual Situation’ over TBC Affair

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On September 6, a group of local and foreign defense lawyers of the founder and former Board Chair of TBC Bank, Mamuka Khazaradze and his Deputy Badri Japaridze, held a press conference concerning the TBC Bank affair in Tbilisi.

Zviad Kordzadze, the Georgian defense lawyer said the case against Khazaradze and Japaridze has gone beyond the Georgian jurisdiction, and that there are enough case materials to apply to the European Court of Human Rights (ECHR). Therefore, he said, “two highly experienced, qualified and well-recognized lawyers” – Steven Kay and Vincent Berger– have joined him to protect TBC Bank founders interests abroad. 

“Highly unusual situation”

In his remarks, Steven Kay said that TBC Bank is listed in UK at the London Stock Exchange, while Khazaradze and Japaridze “have provided very valuable contribution to the regional economy in Georgia,” and that “their business dealings have been very influential upon the development of Georgia as an independent state.” 

According to him, the situation which the two businessmen are facing over “a transaction that occurred eleven years ago” is “highly unusual.” Kay explained that “no criminal proceedings were brought against them as individuals in those eleven years, despite ample opportunity to prosecutors or banking regulators or any other inquirers into the affairs of the bank.”

“The transaction itself was fully documented. It was not concealed. It was known about. It is being reviewed by the National Bank of Georgia on two occasions. It is also being the subject to review in international audits by international auditors, such as KPMG,” Kay said, adding that “it was also the subject of a part of the bank’s due diligence process when it was launched upon the London Stock Exchange as part of the IPO due diligence for the launching of shares in a public offering.”

“Going back eleven years to dig up a transaction that is being fully audited and then to put it into the form of an unusual criminal charge of money-laundering, when it, say, banking transaction involved between the clients and the company, is highly unusual,” according to Kay.

Kay also noted that as the international criminal law expert, he has been brought into the affair “to review matters, to observe how the justice procedure in Georgia is operating, to ensure that there is proper due process, and to scrutinize the conduct of those who are making the allegations.”

Political prosecution?

Kay finds the context of this case “also highly unusual.” “In my review of the matter I have noticed the politicians have been making public statements in their official capacity and official positions, that the leaders of political parties have been making statements and commenting. They appear to have a detailed knowledge of the prosecutor’s case,” he said, adding that “that kind of matter is of great concern as to whether this is in fact a political prosecution or a prosecution that is being conducted in ordinary fashion according to the rule of law.”

Speaking also of the letter submitted to the investigation by Khazaradze, that allegedly contains threats against TBC founder, the authenticity of which the prosecution has found impossible to verify, Kay said it “contained material allegations that now seem to be played out in the evidence that is taking place” in Georgia. This has caused “the letter now to be submitted to a forensic science laboratory” in the United Kingdom, Kay added.

“The results of that analysis have been provided to me. It is also being reviewed for linguistic traits or evidence, the use of language that have been replicated in public statements by people involved in making allegations in this case, and I will now take the use of that letter to a next stage in the future development of this case,” Kay said.

“The point I want to make here is that justice has to be independent, impartial, that the prosecution authorities have to act according to the law as well as be independent and impartial”, Kay said, concluding that “the courts have to be independent and impartial, and the proceedings must be transparent and fair and conducted in court of law and not in a political forum by politicians who are seeking to advance their own interests.”

Mamuka Khazaradze and Badri Japaridze are facing criminal investigation over money-laundering allegations involving a USD 17 million transaction that took place in 2008.

Tbilisi City Court ruled that Khazaradze and Japaridze have to post a GEL 700,000 bail each after being charged in a money laundering lawsuit. They also won’t be able to leave the country without the prosecutor’s permission.

The ongoing investigation into TBC Bank was made public in January 2019 following the media reports that the Prosecutor’s Office seized case-related documentation from the bank.

Khazaradze immediately denied the charges, claiming the legality of the said transaction was inspected multiple times by the local and international fiscal authorities and no “red flags” were raised. He then said the bank was suffering an “orchestrated” political attack.

Developments around TBC Bank have brought into question the fate of the Anaklia Deep Sea Port project, a USD 2.5 billion investment on the Black Sea coast in Zugdidi Municipality not far from Abkhazia, where Mamuka Khazaradze’s TBC Holding is the leading partner.

The Anaklia Development Consortium, a joint venture of TBC Holding and U.S.-based Conti International, was awarded the contract to build and operate the deep sea port in 2016; construction works commenced in December 2017 and are currently underway.

Khazaradze linked the TBC case to the construction of Anaklia port, suggesting that the purpose of the investigation could be to squeeze him and Japaridze out of the project.

In July, Khazaradze announced his plans to set up a new public movement in September aimed at “uniting the country and maintaining its independence and liberty.”

Earlier this week, Khazaradze and Japaridze said the Prosecutor’s Office was arranging a close door meeting on September 6 between the foreign diplomats accredited in Georgia and two foreign experts they had hired over the TBC Bank case.

However, the Prosecutor’s office immediately denied the accusations, saying the “international organizations, representatives of diplomatic corps accredited in Georgia and other interested parties” will read a report “prepared by foreign experts of higher qualifications.”

For more information, visit our tag on TBC Bank.

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