Page 5 - GEORptMar19

2.0 Politics
2.1 Georgia’s Prosecutors reveal alleged frauds of TBC
Bank founders
The Prosecutor’s Office of Georgia has publicised facts it says have been established so far in investigations related to alleged fraud perpetrated by the co-founders, and until recently top managers, of TBC Bank.
The statement referring to Mamuka Khazaradze and Badri Japaridze was issued “to address the public interest”, the Office said.
Prosecutors claim that the bank issued two loans worth $17mn each that indirectly went to the pair. The bank is said to have quickly declared the two credits as non-performing debts, while not proceeding to attempt to recover the money. If the two used the money to increase bank's capital as previously speculated, then the legal implications of the action would be major.
Khazaradze and Japaridze in principle would risk losing part of the shares subject to a subsequent court decision.
Prosecutors claim that TBC Bank extended the two loans in April-May 2008 to two companies: Samgori M Ltd and Samgori Trade Ltd. The companies belonged to “a businessman close to Mamuka Khazaradze”, their statement said.
On the same day, the money was was transferred to Khazaradze and Japaridze’s personal accounts, prosecutors claim. The prosecutors do not state whether there were lending contracts signed between the two companies and the two bank officials—but further details revealed by them indicate that there were such inked contracts.
In October-November 2008, the deadline for the loan repayment was increased for one year without any particular reason. No principal or interest had been paid by that time. By the end of 2008, the loans were declared non-performing without any particular reason, it is said. Before the terms established by the bank regulations, TBC Bank wrote off the loans, meaning that they “were moved to an external balance account”, according to the prosecutors.
TBC Bank did not demand a refund of the money from guarantors. It did not withdraw the money from the accounts of the two companies or confiscate properties used as mortgages for the loans.
Prosecutors claim that normal crediting operations were carried out in relation to the two firms during the whole process.
“It should be highlighted that despite the fact that the loans given to Samgori Trade Ltd and Samgori M Ltd were classified as bad loans, TBC Bank continued crediting the companies of the businessman close to Mamuka Khazaradze and gave them other loans on the basis of other loan agreements,” the press release on the statement reads.
5 GEORGIA Country Report March 2019 www.intellinews.com