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Deeper Look

Context | PM’s Murky Chinese Connection

Prime Minister Irakli Garibashvili pledged a strategic partnership with China and touted Beijing ties in an extensive interview. But Garibashvili’s personal connections with China go way back, as this newspaper wrote when he returned to head the cabinet in 2021. Now, Radio Free Europe/Radio Liberty’s Georgian bureau took a deeper look at the Georgian leadership’s ties with China and specifically one company – CEFC – that employed Garibashvili as an adviser before he returned as a minister to the government in 2019. We have summarized some facts provided in the RFE/RL report below.

Rise and Fall of Ye Jianmin and CEFC

The story starts with Ye Jianming, who transitioned from a police forestry employee to becoming China’s “new oil baron” in 2014. Through his company, CEFC China, he invested billions in ambitious projects.

In 2016, he made Fortune magazine’s 40 under 40 list, and rumors swirled about Jianming being a “prince” – descended from former high-ranking Chinese Communist Party officials. Others speculated he was linked to China’s People’s Liberation Army (PLA), the world’s largest military force.

CEFC’s expensive acquisitions in the Czech Republic since 2015 drew attention. Miloš Zeman, the maverick Czech president from 2013 to 2023, visited China five times during that decade, meeting with President Xi Jinping. In 2015 President Zeman appointed Je Jianming as his economic advisor and forged a strategic partnership with China. The Czech Republic became the lynchpin of China’s format of cooperation with Central and Eastern Europe (“17+1”). Simultaneously, President Xi began to build the ambitious Belt and Road Initiative (BNI) network.

Ye Jianmin’s empire suffered a setback in November 2017 with the arrest of Patrick Ho, the head CEFC’s non-governmental wing, by US FBI agents for bribing officials in Chad and Uganda. He quickly fell out of Beijing’s favor, too. In March 2018, a Chinese publication, Caixin, revealed that the multibillion-dollar CEFC had been operating as a financial pyramid, accumulating debt and taking on more debt. The company denied the allegations, but the reports of Ye’s arrest surfaced in China the next day. Since then, there’s been no word on Ye’s whereabouts or status. The Chinese state took over most CEFC assets.

CEFC-Georgia Partnership

Just as Ye was building his empire in Prague, he also reached out to Georgia.

May 27, 2015: Prime Minister Irakli Garibashvili, alongside other key officials such as Business Ombudsman Giorgi Gakharia, initiated talks with representatives from CEFC.

June 14, 2016: A year later, Prime Minister Giorgi Kvirikashvili announced via Twitter that CEFC, a prominent Chinese enterprise, plans to invest in Georgia. The accompanying image captures a delegation of influential figures from the Georgian and Chinese governments.

July 26, 2016: Deputy Minister of Economy Dimitri Kumsishvili visited Shanghai and spoke with Ye.

Deptuty Minister Kumsishvili and CEFC’s Ye in Shanghai, July 2016

The official release gives little detail about the substance of these talks, mentioning wine exports.

December 14, 2016: Chinese-Georgian Business Forum took place in Beijing. Attendees included government and business delegates. Georgia is represented, among others, by Vano Chkhartishvili, minister in Eduard Shevardnadze’s cabinet since 1999 and now a wealthy businessman close to Georgian Dream founder and patron Bidzina Ivanishvili. Also present was the future Prime Minister Mamuka Bakhtadze. CEFC China announces plans to open a regional office in Georgia and reveals its intention to acquire a substantial 75% stake in the “Poti Free Industrial Zone.”

May 13, 2017: Georgia became the first Eurasian country to establish a free trade agreement with China.

July 15, 2017: Dimitri Kumsishvili, already Deputy PM, and CEFC Executive Director Jianjun Zhang signed a declaration establishing the “Development Bank of Georgia” with declared capital of 1 billion USD. The founders are CEFC and the company “Eurasian Invest” from the Georgian side, with Vano Chkhartishvili as the Chairman of the Supervisory Board.

Around the same period, the “Partnership Fund” – a state investment fund with some of Ivanishvili’s capital – and CEFC signed an agreement to create the “National Fund for Reconstruction of Georgia.”

According to the RFE/RL neither the “National Reconstruction Fund” nor the “Development Bank of Georgia” ever worked.

December 29, 2017: The Government of Georgia transferred 75% of the “Poti Free Industrial Zone” to CEFC’s branch in Georgia, known as “CEFC Euro-Asian.”

Links with Bidzina Ivanishvili

According to the public registry of companies, since June 22, 2018, the company ‘Euro-Asian Management Group‘ from Georgia has managed 75% of CEFC’s shares. The co-chairmen of its supervisory board are Vano Chkhartishvili and Chinese citizen Chingxin Zhen.

Half of this company’s shares were owned by two other companies: ‘China International Group Corporation Limited’ in China, believed to be linked to CEFC, and ‘Eurasian Invest.’ Two UK-registered firms controlled the latter: 51% of shares were held by Brightstone Finances Limited and 49% by Ecliton Commerce Corp. The leaked ‘Pandora Papers’ in 2021 revealed that Brightstone’s controlling ownership is attributed to Bidzina Ivanishvili’s company.

According to the Co-Investment Fund, Brightstone Ltd. is a subsidiary of Frankston International, registered in Panama. Frankston International is managed by the Georgia Co-Investment Fund, a private equity fund with Bidzina Ivanishvili’s capital. “The connection between Frankston and Bidzina Ivanishvili has never been covered up,” the Co-Investment Fund said after the Pandora Papers leak.

After the Shanghai court declared CEFC and its subsidiaries bankrupt, in September 2020, by the decision of the Tbilisi City Court, the “Euro-Asia Management Group” associated with Chkhartishvili and Ivanishvili became the manager of the assets of “CEFC Euro-Asia.”

Garibashvili’s Connection to CEFC

Before returning to the government as Minister of Defense, Irakli Garibashvili served as an advisor to CEFC for 18 months. The CEFC company was already embroiled in an international scandal during this period. On February 18, 2018, a paid advertisement surfaced on the Georgian news agency InterPressNews, announcing that Irakli Garibashvili has been appointed as an advisor to the Supervisory Board of the regional project management company of CEFC Energy Company Limited, one of the largest conglomerates in China.

According to the declaration he filed in the following years, from January 1, 2018, until he was appointed Minister of Defense about a year-and-a-half later, Garibashvili declared to have been paid GEL 410 702 from the “Euro-Asian Management Group.”

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

Radio Liberty/Georgian Bureau


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