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Private Foundations Created by Tbilisi City Hall Linked to Ugulava’s Relatives

17.05.2012


Georgian Young Lawyers Association [GYLA] and Studio Monitor investigated in detail the expenditures made from private foundations created by Tbilisi City Hall. GYLA released a report and Monitor made a film about the issue.

Nana Biganishvili, author of the documentary, told us that Tbilisi City Hall established private foundations for the purpose of rehabilitating Old Tbilisi. The money slated for rehabilitation of buildings was then spent in a non-transparent manner and often reconstruction activities were undertaken without prior competitive bidding.

 “The documentary shows how City Hall sells cultural monuments, how they established foundations which do not adhere to public law,” Biganishvili said. “According to the law, they have certain responsibilities to live up to; instead, they clearly acted selfishly. Our investigation showed that the City Hall foundations were used to carry out rehabilitation but the money allocated to the foundations out of City Hall’s budget was  not used properly, no competitions [for the reconstruction companies] were held. In addition to that, after passing certain amendments to the law, City Hall transferred buildings in the historical districts of the capital to the foundation, which is a non-profit entity, and subsequently, the foundation sold the properties without any competition or tender. They were selling the properties to the people they wanted to sell them to for  the price these people wanted to pay. For example, the foundation sold buildings on Agmashenebli Avenue to a company which is registered in an off-shore zone and whose representative in Georgia is Giorgi Komiashvili, husband of Gigi Ugulava’s sister-in-law in Georgia.  Another interesting case concerns Rike [part of the embankment of Mtkvari river]; the state sold Rike to Akhali Rike Ltd for 7 million USD in 2006. This business group is associated with the Sharangia family and we have documents to prove it. Under the purchasing agreement, they had certain responsibilities, but they did not do anything at the site and in December 2008, the City Hall foundation bought back the Rike site for 17 million USD.”

The head of GYLA, Tamar Chugoshvili, said that working on their report exposed corrupt activities in City Hall and its foundation. She said that huge sums allocated to the foundation by City Hall disappeared in most cases.

“The report covers the ongoing rehabilitation process in Old Tbilisi by private foundations. The foundations created by the state have spent hundreds of millions of lari in a process seriously lacking transparency. First of all, the trace of the sums is lost in the state budget. The amount allocated to the rehabilitation of a particular building is unknown; the names of the companies are also unknown. Mostly, the biddings were won by previously selected companies. Another serious problem is the recently introduced changes to the law which allowed City Hall to sell luxurious buildings with or without the status of culture monuments, after which the foundations sold those buildings. The process of selling and buying is completely non-transparent. The buyer, the price and future purpose of the building are not known. Our report reviews about 56 of these buildings and it was also sent to the Tbilisi City Hall,” Tamar Chugoshvili said.

Interested people can see the documentary on Maestro TV.

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