Who Received Properties for 1 lari from President Saakashvili after Elections

Natia Danelishvili, Information Center of Mtskheta-Mtianeti

Before Bidzina Ivanishvili’s government deprives authority of direct sale of state properties from President Saakashvili, the President managed and assigned expensive state properties to several companies for 1 lari after the parliamentary elections. GeoLand Ltd is among those companies, where Irakli Ugulava, brother of the Tbilisi City Mayor Gigi Ugulava owns 50% share.

During many years, state properties were privatized through direct sale method based on relevant decree of the Minister of Economy and Sustainable Development and was regulated by the Law of Georgia on State Properties. According to the law, based on direct sale of state property and competitive selection, president of Georgia decides on direct sale and makes relevant offers.

According to the new draft-law, submitted to the parliament by Bidzina Ivanishvili’s government, the president will lose authority of direct sale of state property. The author of the draft-law is the Ministry of Economy and Sustainable Development. According to the bill, government will be in charge of privatization of state property through direct sale method, transfer of management right of shares and assets through direct transfer method. Also, the government will fix privatization price of state property, starting privatization price and price of the transfer for usage.

As mentioned above, before the law is adopted, the president managed to transfer expensive properties both in the capital and in different regions of Georgia to transfer to several companies through direct sale method for 1 lari.

One of the companies, which received 8 000 sq. meters non-agricultural plot in Kazbegi district on October 10 for 1 lari, is GeoLand Ltd. Within two years, the GeoLand shall construct mountainous hut and arrange camping zone in the area.

According to the Civil Registration Agency, Ltd GeoLand was registered on July 10, 2003. Initially it had two owners: Aza Mdinaradze and Natalia Partskhaladze. The partners owned equal shares in the company. Between September and October of 2011 one owner was replaced and Natalia Partskhaladze’s husband Irakli Ugulava became the owner of the 50% in the company; the latter is brother of Tbilisi Mayor Gigi Ugulava.

At the same time, Natalia Pirtskhaladze worked at public agency. In 2008, she was deputy head of Tourism and Resort Department of the Ministry of Economy. In 2009, when the department was abolished, Partskhaladze became deputy chairperson of the Tourism Agency.

According to the Institute for Development of Freedom of Information (IDFI), another company, which received non-agricultural plot of 9 386 sq. meters with three-storied building, space of 1 272 sq. meters, through direct sale method for symbolic price of 1 lari, was Ltd EKO Georgia; the property was transferred based on the President’s decree of October 10, 2012.

According to the agreement, the company was requested to reconstruct the building and to open sartorial factory in it within 6 months; as well as to invest 500 000 USD.

There is only one document about the Ltd at the CRA. Ltd EKO Georgia was registered in Batumi on September 7, 2012. Its directors are Osman Chalishkan and citizen of Turkey Ozjan Sumer. The latter is 100% share holder in the company.

It is noteworthy that one of its directors, Osman Chalishkan (Mzhavanadze) is Secretary General of International Investors Association. The association is a nongovernmental organization, which was set up on July 14, 2009 in Batumi and currently it unifies 23 member companies including Bank of Georgia and GPI Holding. According to its official website, the Association’s mission is to promote interests, to lobby and to protect interests of the association members both in the society and governmental circles on national and international level.

Based on the President’s decree of November 5, 2012, Ilia State University received 42 estates in Tbilisi, Sagarejo, Dedoplistskaro, Tsalenjikha, Martvili, Zugdidi, Oni, Aspindza, Ninotsminda, Akhalkalaki, Lanchkhuti, Chiatura, Kazbegi, Vani, Lagodekhi, Mtskheta, Tetritskaro, Kutaisi, Akhmeta  and Borjomi – more than 283 000 sq. meters space in total- for one lari. Besides, Ilia State University received movable property – more than 12 500 items.

Head of IDFI Levan Avalishvili told ICMM that in some cases transfer of state property for symbolic price is justified though here we have problem of process transparency.

“It is not law violation when state property is sold for symbolic price because in accordance to the law, government has right to sell state property for 1 lari in particular cases but it depends on the sale conditions. I think properties shall be transferred for symbolic price transparently because other company might offer better investment proposals and invest more money or some corruptive deals might take place. We have horrible practice in the view of transparency. Also, after property is sold for symbolic price, it should be controlled and unless agreement requirements are met, the company shall be held responsible for that,” said Levan Avalishvili.