Anonymous offshore ownership of companies registered in Georgia contributes to “elite corruption” in the country, Transparency International (TI) Georgia says in a study published on June 10.
The watchdog argues that the Georgian Government has not taken any steps to compile a register of the real owners of the companies registered in offshores, despite a 2016 pledge made at the Anti-Corruption Summit in London.
TI Georgia reckons that offshore ownership could benefit Government officials attempting to sidestep the laws and retain their stakes in businesses. Offshore ownership could then enable companies owned by these officials to partake in the state-funded projects, privatization, and public procurement deals, according to TI Georgia.
The study uncovers companies fully or partially owned in offshores that have purchased public properties through direct privatization in 2012-2020, and fifteen that have received the property through a state auction. Watchdog estimates the overall worth of the assets at GEL 77 million (USD 24.5 million), excluding those estates that were put up for a symbolic price.
In one of such auctions, the watchdog highlights, Abastumani 2019 LLC purchased three state-owned assets in Georgia’s southern town of Abastumani. The company is owned by Limestone Finance International, registered in Panama, and allegedly linked with Georgian Dream founder billionaire Bidzina Ivanishvili, according to TI Georgia.
Overall, TI Georgia traces ten companies “connected to Bidzina Ivanishvili,” registered in various offshore havens including in the British Virgin Islands, Panama, and Belize.
38% of the USD 5.2 billion in FDI Georgia received throughout 2011-2020 came from countries that have offshore zones, according to the study. Also, TI Georgia uncovered around 3,200 companies, including 160 large and medium enterprises, registered in Georgia that are either fully or partly owned by entities registered offshore.
Among the firms, TI Georgia cites some of the largest enterprises operating in the country, including Tbilisi Energy – a gas supplier for the capital city, Beeline – a major communications firm, IDS Borjomi – a mineral water giant, Clean House – a massive chain store for home care products, GMT Hotels – the owner of Tbilisi Marriott Hotel and Tbilisi Courtyard by Marriot Hotel, as well as Rustavi Steel, Silkroad Group Holdings and Rustavi AutoMarket, among others.
- Q1’21 FDI USD 125.4 Mln, Down by 28.3%
- 2020 FDI in Georgia USD 616.9 Mln, Down by 52.9%
- Georgia in TI’s 2020 Corruption Perception Index