The Georgian prosecution has been pursuing Giorgi Bachiashvili for allegedly defrauding Bidzina Ivanishvili, patron of the ruling Georgian Dream party. Radio Liberty took a closer look at the rise and fall of Ivanishvili’s close confidante and financial advisor. We are providing a brief summary of this report.
It all started in 2010 with Ivanishvili’s conversation with his ophthalmologist, who talked up his son, a recent graduate from the prestigious INSEAD business school in Paris. In a year, Ivanishvili reached out to Bachiasvili, then already working for Booz and Company in Moscow, and gave him control of his financial assets in Russia and Georgia. This falls into the pattern of Ivanishvili elevating people from his close inner circle of confidence.
Bachiashvili rose quickly. In 2013, Bidzina Ivanishvili established the “Co-Investment Fund” (GCF) with a substantial capital of $6 billion, of which $1 billion was his own. GCF has become a major player in various sectors, financing projects such as “Panorama Tbilisi” and “Galeria Tbilisi” and making a mark in energy, infrastructure, tourism, and real estate.
Bachiashvili played a crucial role in managing GCF and was considered one of Ivanishvili’s closest and most trusted associates. He owned a significant stake in GCF Partners, the fund’s management company, along with Ivanishvili’s cousin, Ucha Mamatsashvili. Over time, Bachiashvili became the sole owner of GCF’s management company and rose to the position of chairman of the supervisory board in 2019.
Bachiashvili’s influence extended beyond GCF as he ventured into the technology, fintech, blockchain, and cryptocurrency industries by founding the company Mission Gate. His “angel investor” expertise earned him recognition when he was named to Forbes’ “30 Under 30” list in finance in 2014. Notably, he has been an outspoken advocate for digital currencies, investing in cryptocurrency-related projects such as “Bitfury” and “Kryptomat” and securing the government’s support – including tax breaks – for them.
In 2014-2015, the cryptocurrency company Bitfury received significant support from Ivanishvili’s co-investment fund. They received a million-dollar loan and were granted 18 hectares of land by the Georgian Ministry of Economy for a symbolic price of 1 GEL. With this support, Bitfury built cryptocurrency generation centers in the town of Gori and Tbilisi’s suburb of Gldani. In addition, the government granted the Gldani area the status of a free industrial zone, exempting Bitfury from profit, property, and value-added taxes.
In 2018, the cryptocurrency ATM operating company “Kryptomat” was launched in various Georgian cities. These ATMs allowed people to buy and sell cryptocurrencies such as bitcoin, lite coin, bitcoin cash, and Ethereum in Georgian Lari (GEL).
Bachiashvili’s high-profile connections often saw him accompany top Georgian government officials on international trips. He was even rumored to be a potential candidate for the post of economy minister in 2019, although the appointment did not materialize.
Fall from grace
In September 2022, Bachiashvili testified in favor of Ivanishvili in his high-profile haggle with Credit Suisse, which Ivanishvili accuses of defrauding him. Three months later, Bachiashvili sells – through an intermediary – 100% of his stake in GCF Management to Ivanishvili’s cousin and vanishes from public view.
According to Ivanishvili’s lawyers, the first fissures in Ivanishvili’s confidence reportedly emerged after he became suspicious of errors in the “Mtkvari HPP” project managed by the GCF. The project overran costs – it was supposed to cost $131 million and be commissioned by 2020, but it remains unfinished, with the budget almost doubled to $235 million. The patron’s doubts were apparently deepened by Bachiashvili’s significant real estate acquisitions in Georgia and abroad after 2015.
Accusations of defrauding Ivanishvili
The prosecution says Bachiasvhili convinced Ivanishvili to invest in Bitcoin mining through Bitfury in 2015. It says Ivanishvili invested USD 5 mln, and Bachiashvili USD 1,3 million, understanding that 79,3% of profits will go to Ivanishvili and 20,7% to Bachiashvili. After one year’s operation, the profit amounted to 24, 661.85 Bitcoins in 2017. The prosecution says Bachiashvili defrauded Ivanishvili, appropriated USD 40 million’s worth of them, and hid them in various cryptocurrency accounts.
Bachiashvili’s defense challenges that Ivanishvili was never a co-investor, but a facilitator of a loan of USD 5 mln, from his Cartu Bank.
Current status of the case
According to the prosecution, Ivanishvili gave his testimony in April 2023. Upon return to Georgia in Summer 2023, Bachiashvili’s property was impounded. On June 17, the pre-trial hearing also impounded his assets and shares in various firms.
On July 6, Bachiashvili was officially charged, and the bail was posted at GEL 2.5 million.
Conspiracy theory
Ivanishvili has not spoken publicly since 2021. The prosecution and his lawyers conveyed all statements on his behalf regarding Bachiashvili.
Interestingly, a man close to Ivanishvili, philosopher Zaza Shatirishvili, who actively peddled a conspiracy theory of Credit Suisse case being linked to the Western conspiracy against Georgia and Ivanishvili, also linked Bachiashvili’s case to a plot. In a letter, widely promoted by pro-governmental media and social accounts, he wrote the “American special services” had recruited Bachiasvhili and used him against Ivanishvili to “drag Georgia into war” with Russia. According to Shatirishvili, Ivanishvili is a “person unacceptable for the United States in principle” because he created “the first and only precedent worldwide when the well-established American agentocracy has ended and democracy was restored.” Shatirishvili presents as proof of this conspiracy that [fugitive Russian tycoon Mikhail] Khodorkovsky’s defense lawyer “was appointed [by the Americans]” to represent Bachiashvili.
Robert Amsterdam, who represents Bachiashvili is the former defense lawyer for Khodorkovski’s YUKOS. His son, Samuel Amsterdam has lobbied for Bidzina Ivanishvili in 2012, Radio Liberty found.
Robert Amsterdam told Radio Liberty that the case against Bachiashvili is politically motivated. He claims that Ivanishvili distanced himself from Bachiashvili due to the latter’s pro-Ukraine stance after the Russian invasion.
Notably, some politicians and influential figures are urging the EU and the US to impose sanctions on Ivanishvili as the “shadow ruler of Georgia” in light of the country’s political positions following the invasion of Ukraine.
This post is also available in: ქართული (Georgian) Русский (Russian)
