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Patarkatsishvili’s Hard Life

Who is attacking the business activities of Badri Patarkatsishvili and why?

The spokesperson of businessman Patarkatsishvili stated that ever since TV Company “Imedi” and “Mtatsminda Park” have stopped functioning, the “Standard Bank” was next on the list. On November 24, the Georgian National Bank (GNB) appointed an interim administration for the “Standard Bank”. The owner of the bank is the US Investment Group and it is managed by “Salford Georgia”.

JSC “Standard Bank”

“Salford”, an official owner of the “Standard Bank”, protests the appointment of an interim administration for the bank on the initiative of the GNB and states that the latter acted illegally.

Businessman Badri Patarkatsishvili had indirect interests in the bank. “Salford Georgia”, which implements the management of the investment portfolio of Badri Patarkatsishvili with a value of 100 million USD, stated that the seizing of the shares of “Salford” in the “Standard Bank” is part of a campaign against Patarkatsishvili’s interests in Georgia carried out by the authorities.

Irakli Rukhadze, director of “Salford”, claims that since November 7th clients of the “Standard Bank” were persuaded to cancel their accounts at the bank. Rukhadze said that such an act was aimed at the artificial collapse of the bank’s degree of liquidity which would result in the appointment of an interim administration and the company would lose control over the bank.

Representatives of the company stated that in response to the persuasion, many clients - both state organizations and people - canceled their accounts at the bank. “Because of its financial strength, the bank managed to satisfy the demands of the customers according to Georgian legislation. We consider that the GNB violated both Georgian and international law,’ said Rukhadze.

He also added that the companies under the umbrella of “Salford”, people connected with the company and its personnel have been pressured by various governmental bodies in the last two weeks. “On November 21, after a twenty-hour interrogation, I was found guilty groundlessly and they charged me for forced trading under paragraph III of the recently amended Article 339.1, of the Georgian Criminal Code. Several people were interrogated and they conducted a search based on that charge. In addition, representatives of the Financial Police and the Ministry of Internal Affairs raided the “Georgian Glasses and Mineral Waters”, “Telenet” and “Standard Bank”. These companies only have one thing in common - all of them are managed by “Salford,” said Rukhadze.

Thus, the representatives of “Salford” think that the situation has a political character and they think that the current events cause serious concern in the financial sector for foreign investments in Georgia.

Representatives of “Salford” presented a group of lawyers from the leading international law firm “Debevoise & Plimpton LLP” who will protect the business activities of “Salford”.

Giorgi Kadagidze, the head of the interim administration, stated at the briefing yesterday that their introduction to the bank was caused by the problems concerning the liquidity of the “Standard Bank”. This problem resulted from the increased withdrawal of funds from the bank. During the last two weeks, over forty million lari has been withdrawn from the “Standard Bank”, which threatened the interests of both the bank creditors and the customers. The principal function of the National Bank is to protect their interests. That is the reason for the introduction of an interim administration for the bank. The interim administration will stay on for two months. 

Kadagidze explained that they do not intend to liquidate the Standard Bank. The aim of the National Bank is to promote the financial stability and protection of creditors and customers’ interests.

Kadagidze stated that the interim administration was assigned to the “Standard Bank” according to all relevant laws. In doing so, the National Bank ensured the protection of the deposits of all customers of the bank and it monitors the activities which will ensure the normal functioning of the bank.

Kadagidze declared that the statement of Rukhadze was absurd where it stated that the National Bank was putting pressure on the employees of the Standard Bank.

Kadagidze said that such irresponsible statements serve the collapse of the financial stability of the “Standard Bank”.

Mtatsminda Park

Linx Ltd, the company operating Mtatsminda Park which belongs to Badri Patarkatsishvili, protests the decision of Tbilisi City Hall regarding the cancelation of 49-year-contract with the company.

Tbilisi authorities closed the park after armed and masked people rushed into the park at 11:00 AM on November 7.

According to the representatives of Linx Ltd, despite many questions, the masked men did not produce any documents or gave any verbal explanations for their actions.

Later, Tbilisi vice-Mayor, Giorgi Akhvlediani, stated that the contract on the restoration of the park was canceled. He added that “Linx Ltd” has not paid the lease since 2005 and has not fulfilled other conditions of the contract, despite many demands.”

In addition, Akhvlediani pointed out that the “minimal sums” which were spent until now would be reimbursed.

Most of the construction works and carousels have already been finished; however some is still under construction. The park opened in September and people could enjoy it for free.

“We do not want the park to become another “Ar Ashenda” (a well-known unfinished building in Tbilisi) because of the inactivity of “little men” (the surname of Patarkatsishvili means little man in Georgian),” said Zaza Begashvili, chairman of the Tbilisi Municipality. “All projects initiated by Patarkatsishvili in Georgia have failed.”

According to “Linx Ltd”, none of the parties, the Tbilisi authorities being among them, that transferred the park to Linx for 49 years, provided any legal documents serving a justification for their actions. “The only information the company has received are TV statements by two high ranking officials, Mamuka Akhvlediani and Zaza Begashvili. They claimed that the Linx had been late in paying the lease,” representatives of the company said.

The company denies these accusations; it considers them groundless. “The letter signed by Akhvlediani on November 17th 2007 demonstrates that according to the government’s decision Linx had to pay the lease until November 17th 2007,” said people from “Linx”.

The Human Rights Center read the above-mentioned letter on the following website indicated by “Linx”: http://www.flickr.com/photos/19808610@N08/1982238468/.The letter stated that Tbilisi City Hall assigns a one-month period to “Linx” “for them to pay the outstanding amount of the lease”.

The company categorically denies the statements made by Akhvlediani and Begashvili, who said that “small investments were made in the park, but much is still to be done.” “Although the lease contract between the company and the government envisaged an investment of five million USD, the company has in fact invested almost 25 million USD and intends to make more investments in the near future. The absurdity of their statements is demonstrated by the fact that the park was unofficially opened in September of 2007 and had been operative for nine weeks before the policemen raided it. Nearly 80 000 guests visited the park in September and October. Public officials also visited the park several times and they were fully aware of the progress made in the park,” said representatives of “Linx”.

The company holds on to its strict position and has complied with the demands of government officials. The company claims that “Linx” intends to continue protecting its rights according to the contract they have signed with the state.

As for “Telenet” and the “Georgian Glass and Mineral Waters Company”, the financial police unexpectedly raided them on November 20. After a two-day investigation, the Financial Police returned the documents to the company and left the office without any explanations.

The Human Rights Center tried to get in touch with representatives of the Financial Police, but none of them replied to the questions raised by the Center.

Nino Tlarkhnishvili, Tbilisi

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