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Property Owner To Defend His Rights at Strasbourg Court

September 6, 2012

Inga Gvasalia, Poti

Government of Georgia speaks more about attraction of investments, freedom and promotion of business than it really happens in the country. A lot of facts of illegal deprivation, seizure, assignment and misappropriation of properties are known. Humanrights.ge will present a new case of property rights’ violation in this letter.

Owner of the Poti Agricultural Market Kolkhi 21 is one of those businessmen who believe President Mikheil Saakashvili’s promises and returned to Georgia several years ago to start business here. Two months ago, his property was put on auction through violation of all terms and law and the businessman lost his property.

Fining of Kolkhi 21

In 2010, revenue service entered Poti Agricultural Market one day and fined it with 259 000 lari. The motive was unidentified traders according to the receipts.

Three-storied agricultural market Kolkhi -21 equipped with modern standards was constructed in 2005. About 500 people are employed there and most of them are IDPs from Abkhazia. Some employees are from socially vulnerable families. Market administration semi-discharged those people from tax-payment.

Kolkhi -21 is complex of two premises and each of them has separate cadastre code. Products are sold in one premise and clothes in the second one.

Temporary Silence of Korsnatia

Human Rights Center tried to check the information obtained from the reliable source with Nodar Korsantia, the owner of the market. He got very surprised that we were informed about his probleb but refused to make official comment during ongoing pre-election period – he said he did not want to politicize his case. But in private conversation he hinted out that he had unfairly lost huge effort and money. He said he intends to appeal to all instances of court in Georgia and if he does not achieve result here he will also appeal to the European Court of Human Rights in Strasbourg.

Owners “sold” together with the Kolkhi

We got in touch with Giorgi Kishmaria, lawyer of the Kolkhi-21 to get official comment from him; he claims there was no ground and evidence to fine the company but tax inspectors relied on the testimonies of five traders of the market and imposed such a solid fine on the market.

Those five traders alleged they incorrectly paid taxes. The lawyer claims the traders were compelled to give similar testimonies because they soon denied the information they had given to the tax inspectors. The Company sued the incorrectly imposed fine but as Kishmaria said it did not change anything except prolonging the process and additional percents added to the fine. So, total amount of fine exceeded 800 000 lari at an astronomic speed.

The source told us, the market owner applied to all legal national instruments but the enforcement bureau put the market on the auction. However, the auction terms were breached in this particular case too. One part of the market was assigned to the VTB Bank on the first auction and the second party with the debt of 3, 5 million USD was assigned to the state. It is noteworthy that about 15 other private owners were operating in the territory of Kolkhi -21 who had no debts at all. Their interests were completely neglected. It is paradox that Bank and the state became owners of those private owners too.

Lawyer about violations

Giorgi Kishmaria, lawyer of the Kolkhi – 21: “There are many violations in this case. We do not know who had financial and legal interests in this company and who participated in this case. Everything was done in haste and they wanted to finish everything in the shortest time. It resembled a conspiratorial theory where concrete people tried to get hold of the premise constructed by the founder because according to the law, state could seize only the part of the property adequate to the imposed fine and not everything. Usually, tax inspectors try to reach agreement with debtor but in our case everything happened vice versa. We offered them to make some deal several times and promised to pay 350 000 lari, more than initially imposed fine but they refused; so we think somebody had particular interest in it. Somebody was eager to get hold of our entire property but unfortunately the property was mortgaged in the VTB and TBC Banks – total loan 3.5 million USD. Normal person would have guessed that they would have purchased our property together with its debt in the banks. I think responsible persons, who participated in this case, shall be punished for having declined our offers because one bank has already obtained one of the two premises and registered it; and the second was assigned to the state together with its debt. Soon, the Bank will obtain that second part too and will request realization of the property. The state will lose everything.”

Curious and lack of professionalism

One more curious and incompetent fact occurred when Kolkhi – 21’s property was put on auction. Based on the February 15, 2012 decree Poti City Court satisfied the request of the Samegrelo-Zemo Svaneti Regional Enforcement Bureau to realize the sequestered property. As it shows, the Court mixed up the cadastre code in the decree and prepared different property for realization. Solicitation of the Enforcement Bureau issued on May 17, 2012 proves it as it requested to correct the cadastre code. So, we can conclude that the case was fabricated in haste and without preparation. Afterwards, Poti Court satisfied the solicitation by absent proceeding and corrected the mistake. Giorgi Kishmaria clarifies that law allowed them to sue the judgment of the Poti Court within 12 days and they lodged suit seven days later but Enforcement Bureau could not wait for the estimated time-limit and put the property on the auction through violation of terms.

“The judgment was not put in force because the estimated time had not expired. We appealed to the Tbilisi based National Enforcement Bureau to halt the auction because we had appealed the court judgment and the property was put on the auction illegally, but they did not satisfy our appeal,” Kishmaria said.

Comments … only upon permission of senior officials

Humanrights.ge asked Teimuraz Kharzian, representative of the Poti Enforcement Bureau to comment on the case. We wondered why they had assigned the company to the state which had a debt of 3.5 million USD instead withdrawing fine of 800 000 lari. He got very surprised at the purpose of our visit and asked how we know about alienation of the Kolkhi 21. He refused to comment on the issue and explained in two words that everything was done in accordance to the law. A woman sitting in Kharziani’s room asked him: “Do senior officials know that you give comments about this issue?” so we could not make Kharziani to say a word after he was “reminded” how to behave.

Head of Samegrelo-Guria-Zemo Svaneti regional department of the State Property Registration and Privatization Gocha Kankava was also surprised to hear the purpose of our visit and said he had no information about this case.

Strasbourg Court – Last Hope

Although property was seized from the administration of Kolkhi – 21 and was put on the auction on June 6, 2012, the company has not received official document about it yet. So, Kolkhi – 21 still runs the market. Our source of information notified that Ministry of Economics cannot understand what to do with the property of Kolkhi – 21.

Market administration requests to annul the resolution and results of auction; otherwise they will appeal to the European Court of Human Rights.

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