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Banking intrigues and King Rostom's Palace at the center of political storm

By Gvantsa Gabekhadze
Monday, October 31
Cartu Bank, owned by billionaire-turned-politician Bidzina Ivanishvili, refused the Georgian National Bank’s offer to take USD 2 million and Euro 1 million as a loan--an equivalent amount from Cartu Bank had been sequestered by the Georgian police after it was taken by police from Cartu Bank's armored cash transit van last week.. In a statement published on October 28, Cartu Bank said that it has one of the highest liquidity levels in the Georgian banking sector. This statement was made in response to remarks by the President of the National Central Bank of Georgia, Giorgi Kadagidze who told journalists on October 27 that the Georgian National Central Bank was ready to allocate “financial resources” for an amount of USD 2 million and EUR 1 million in order “to put an end to political speculations” over the issue.

It is difficult to say how the Central Bank’s suggestion would suspend speculations over the issue, however, the Cartu Bank does not take assistance and has sated that the authorities have politicized the issue by targeting the bank because of its owner Bidzina Ivanishvili’s decision to go into politics.

Cartu Bank has stated that while its cash was seized under the pretext of "preventing money laundering" the authorities have never questioned the Bank of Georgia’s role as origin of the funds. The cash confiscated was withdrawn by Cartu Bank from Bank of Georgia headquarters. In its statement Cartu Bank described the Bank of Georgia as “loyal to the authorities”.

Cartu Bank also pointed out that ongoing inspection into its operations, launched by the Georgian Central Bank, was “actually carried out in the regime of a temporary administration.” Cartu Bank has also claimed that “pressure was exerted” on its clients to withdraw funds from the bank. In its statement Cartu Bank strongly demands "a halt to politically-motivated pressure on our bank and on its clients, and the return of unjustifiably seized cash.”

However, the sum detained “with the accusation of money laundering” – as the Interior Ministry claims-- is not the only illegal issue Cartu reproaches the Government for. Cartu Bank's property on Erekle II Street has now been threatened, as the Bank leadership claims. Bank administration has been notified that anonymous persons are claiming that they own 150 square meters of land on Erekle II Street where they want to open a cafe near King Rostom’s Palace.

Cartu Bank believes all current intrigues are related to Ivanishvili’s entering politics. Although the Interior Ministry has not commented on Cartu Bank's property issue after the money sequestration was carried out, Tbilisi Mayor's office responded immediately to the accusations. The Mayor`s Office said it is surprised at the accusations released by Cartu Company. "We find them groundless, untrue and politicized." They continue, "Tbilisi Mayor`s Office is carrying out the Old Tbilisi Rehabilitation program and welcomes all partner organizations making a contribution to the rehabilitation... as well as development of the economy and creating jobs...” According to that office King Rostom's Palace had already been discussed and shouldn't be related to politics. The Cartu Group said earlier, however, that the city inspectorate of Tbilisi's Mayor`s Office had prevented them from continuing the rehabilitation works planned for King Rostom`s Palace in the centre of the capital.