Long Litigation Finished and Jewish Businessmen Are Free

Aleksi Bezhanishvili

On December 2, the President of Georgia Mikheil Saakashvili pardoned Jewish businessmen Ron Fuchs and Zeev Frenkiel. The president’s spokesperson Manana Manjgaladze clarified that based on the petitions of the Israeli government and the Israeli President, the President of Georgia decided to pardon the Jewish businessmen.

“The decision was made based on humane views and considering the age and health conditions of the prisoners,” Manana Manjgaladze said.

Businessmen Ron Fuchs and Zeev Frenkiel were detained in October of 2010 for offering bribe to the deputy minister of finances of Georgia. The Court sentenced Ron Fuchs to seven year imprisonment and Zeev Frenkiel to 6, 5 year imprisonment.

On the same day [November 29] the Ministry of Justice spread information that the Government of Georgia finished the long arbitrage litigation with Jewish businessmen.

According to the Ministry, as a result of long and intensive negotiations, the government of Georgia achieved the advantageous agreement with Tramex International Inc on November 29, 2011. More precisely, at last the Georgian party has finished the long arbitrage litigation successfully.

The Ministry of Justice reported to the Interpresnews that the litigation was about March 3, 1992 arbitrary decision of that-time government of Georgia, based on what the state company SakNavtobi signed one-sided agreement with the representatives of the Tramex International Inc – Ron Fuchs and Ioannis Kardassopoulos. Based on the agreement, one company – Tramex International Inc – acquired exclusive right to manage the gas and oil infrastructure of the country.

The Ministry stated that within one year term the company obtained the 30-year exclusive right of managing the entire oil network in the territory of Georgia as a result of illegal activities of the former government of the country. In exchange of those agreements, the Company did not pay anything to the state budget. Moreover, it did not even fulfill the minimal responsibilities taken under the agreement.

Since 1996, after the Oil and Gas International Corporation of Georgia was established, it obtained the full right to manage entire oil and gas infrastructure in Georgia. Relatively, the representatives of the Tramex International Inc started litigation to claim the legality of the previously signed agreements both in Georgia and in international arbitrary courts.

The International Arbitrage passed verdict and imposed 98 million USD on Georgian state to pay to the shareholders of the Tramex International Inc Ron Fuchs and Ioannis Kardassopoulos which finally amounted to 110 million USD through accumulated fines.

According to the Ministry of Justice, the government of Georgia did everything to avoid financial sanctions caused by illegal activities and corruption of the previous government. With the purpose, the Government of Georgia conducted negotiations together with international law companies and achieved agreement which put an end to years-long litigation.

The ministry noted that finally Georgian state will pay only 1/3 of the initially exposed payment so the state budget saved 70 million USD that is financially advantageous offer for Georgia.

How to sell the building of the Parliament of Georgia?

According to the evaluation of the President’s administration, the government of Georgia treated the Jewish businessmen fairly and discharge of 70 million USD also proved it.

During traditional briefing on December 6, Manana Manjgaladze commented on the information spread by Jewish media about the intention of the Georgian authority to sell the building of the Georgian parliament to the Jewish businessmen and said:

“I cannot make any comments about it. According to the agreement, the Georgian side shall pay 40 million USD. This case originated from the criminal-corruptive deals made in the 1990s and it was serious burden for our state. I would remind you that discharge of 70million USD from the totally imposed 110 million USD proves that the government of Georgia acted correctly,” said Manjgaladze.

The Jewish newspaper “Izrus” wrote based on the information provided by Mordekhai Tsivin, the lawyer of Zeev Frenkiel that President Mikheil Saakashvili offered Jewish businessman to purchase the parliament building for 40 million USD in exchange of the freedom.

“About four months ago, I took a quick flight to Tbilisi by the plane of one of the friends of the imprisoned businessmen; we were told something had changed and Mikheil Saakashvili was ready to make an offer. As we found out, he initially wanted Jewish side to purchase the building of the Georgian parliament for 140 million USD. According to the deal, Georgia owed 100 million USD to the Jewish businessmen and their companies and the Jewish side had to pay 40 million USD to Georgia. Later, Saakashvili offered us to renovate the building and assign it to the government of Georgia for 30-year lease agreement,” Tsivin said and added that the deal failed.

“First of all, Saakashvili requested high price. Besides that, according to our past experience, they could seize the building from the Jewish business very easily and there was no guarantee that Fuchs and Frenkiel would be released. Finally, their freedom cost 70 million USD that is half price of the offered value of the parliament building,” said Tsivin.

He added “fight against Jewish businessmen was conducted on every front.”

“We intended to raise the issue at the European Parliament in order to recommend the EU to send observes of this case to Georgia; they have serious problems in this field. I have never seen similar problems in any other post-soviet republics. It was real long war. However, with the participation of the Foreign Ministry, everything was resolved,” said the lawyer.

According to the Isrus, “President Shimon Peres, US State Secretary Hillary Clinton, US ex-president Bill Clinton, US Senator Joe Liberman, high-ranking officials of Turkish and Dutch governments, Knesset speaker Reuven Rivlin and influential representatives of the Georgian Diaspora were involved in this case.”

According to the IPN and News Agency Pirveli