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Court Concludes Hearings in Controversial TBC Bank Money Laundering Case

The Tbilisi City Court held the last hearing in the controversial money laundering case against TBC bank founders, now opposition Lelo party leaders, Mamuka Khazaradze and Badri Japaridze and businessman Avtandil Tsereteli, the father of the founder of government-critical TV Pirveli channel.

The Court is expected to deliver the ruling in the case on January 12.

Khazaradze, Japaridze and Tsereteli are charged under Article 194 (2a, 3c) of the Criminal Code, involving the legalization of illegal income (money laundering) committed jointly by more than one person and accompanied by the receipt of particularly large income. If convicted, the three could face nine to twelve years in prison.

Noteworthy that Badri Japaridze currently enjoys a lawmaker’s immunity as an MP of the Lelo party. Khazaradze meanwhile quit the Parliament in protest over “void” local elections of 2021.

Background

TBC Bank is one of the leading commercial banking companies in Georgia, founded in 1992 by Mamuka Khazaradze and Badri Japaridze, who have previously also served as its Board Chair and Deputy, respectively.

The Prosecutor’s Office launched the probe into money laundering in August 2018, but the investigation only became public knowledge in January 2019, when the prosecution seized case files from the bank.

Prosecutors argue that the bank loaned about USD 17 million in April and May of 2008 to Samgori Trade and Samgori M, owned by Avtandil Tsereteli. According to the investigation, Tsereteli funneled the money back to Khazaradze and Japaridze, while the loan itself was written off in 2012.

Prosecutors pressed charges against Khazaradze and Japaridze in July 2019. But the businessmen, now also opposition politicians, denied the charges, arguing that the transaction was legal and inspected by local and international fiscal authorities without raising any red flags.

The suspects have claimed the investigation was politically motivated, as well as an attempt to foil the construction of the Anaklia Deep Sea Port, widely regarded as a strategically and commercially crucial project.

The project was implemented by the Anaklia Development Consortium – a joint venture of TBC Holding and U.S.-based Conti International which was awarded the contract to build and operate the port in 2016.

But the ADC faced multiple setbacks, including the money-laundering allegations against Khazaradze and Japaridze. Soon after the prosecutors filed charges against the two, Conti International announced its departure from the Consortium.

The development finally resulted in the Government terminating its contract with the ADC in January 2020, as the Consortium was unable to find a major investor to replace the Conti group.

Khazaradze himself has pointed accusatory fingers at Bidzina Ivanishvili, billionaire and founder of the ruling Georgian Dream party, arguing the tycoon was personally against the construction of the Anaklia Port to appease Moscow.

On January 11, 2022, Khazaradze claimed after the final court hearing that the probe was a “political vendetta.” He claimed that Ivanishvili in 2021 relayed an offer to sort the issue out and “end it,” alluding to possibly reaching a deal to either make the charges go away or clinch an acquittal in courts.

“He wants everyone to be in debt to him,” said Khazaradze adding “you must either be indebted to him or be on his blacklist, that he will always have a kompromat to act against you.”

Khazaradze in 2019 also alleged that then-Interior Minister Giorgi Gakharia had delivered a letter in fall 2018, ahead of the investigation, warning and threatening the three businessmen.

After the businessmen relayed the letter to the investigators, the prosecution said in 2020 that examination had found the letter did not contain any fingerprints of Gakharia.

The case has had a wide resonance in Georgian politics, with the opposition largely regarding the probe as politically motivated, alongside investigations such as proceedings against United National Movement leader Nika Melia, UNM-era Defense Minister and TV Formula Founder David Kezerashvili and ex-President Mikheil Saakashvili.

Read more on the controversial case:

This post is also available in: ქართული (Georgian) Русский (Russian)

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