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Court Found Lelo Leaders Guilty of Fraud, Prison Term Waived

By Natalia Kochiashvili
Thursday, January 13, 2022
Founders of TBC Bank and current leaders of the Lelo opposition party Mamuka Khazaradze and Badri Japaridze, as well as Avtandil Tsereteli, then owner of LTDs Samgori M and Samgori Trade were found guilty of fraud by Tbilisi City Court on 12th of January.

According to the judge, the court reclassified the charges for Khazaradze and Japaridze from money laundering to fraud, although they were found guilty, due to the statute of limitations their prison time of 7 years was waived. As for Tsereteli, his charges were requalified to complicity in a pre-arranged fraud committed by the group which caused significant damage, thus was sentenced to 7 years of prison, which was canceled as well. The measures of restraints such as the seizure of property and ban on border-crossing were lifted too.

The Prosecutor's Office of Georgia has released a statement according to which, the prosecution will appeal the decision in the Court of Appeals within the time limit set by law.

“Tbilisi City Court fully shared the evidence presented by the prosecution and found Mamuka Khazaradze, Badri Japaridze, and Avtandil Tsereteli guilty of fraudulent misappropriation of $16,664,000 belonging to JSC TBC Bank on charges of Article 180 of the Criminal Code of Georgia. However, the court did not agree with the prosecution's assessment of the legal qualification of the crime committed, which is why the defendants' actions were qualified as fraud” statement read, clarifying that decision will be appealed in Court of Appeals.

The Lelo leaders and Tsereteli deny the charges against them and state that the case is politically motivated, saying that they will appeal the court’s decision as well. Khazaradze stated on the previous day that behind the criminal charges against him stands the founder of the Georgian Dream party, Bidzina Ivanishvili, claiming that ‘we are dealing with political persecution and an oligarchic system.’ They say that the criminal case aimed to reject the Anaklia deep sea port project ‘which aimed to strengthen Georgia’s geopolitical role.’

The Anaklia Development Consortium won a state bid to construct the port and signed a deal with the government in 2016 with TBC Holding as its principal partner, but the project was paused in 2019 because according to Khazaradze ‘strategic project wasn't favored by Russia’.

Khazaradze argued the ruling on fraud was based on the 2012 write-off of the loan. TBC Bank founders have claimed that multiple bad loans from 2008 were forgiven in 2012 as they coincided with the Russo-Georgian War. But Khazaradze pointed out that the Bank’s action had not been probed separately. ‘This is nonsense,’ he said - ‘in 2008 we were accused of money laundering, but now it turns out that we have committed fraud. This is a farce and the fight will continue.’

Lawyer for the founders of TBC Bank, Zviad Kordzadze commented that yesterday the court confirmed that no money laundering had taken place.

Recall that investigation into the case was launched in August 2018, while criminal charges against Khazaradze and Japaridze were filed on July 24, 2019. Prosecutor’s Office claimed that in April-May 2008, TBC Bank gave 17 million USD to LTDs Samgori M and Samgori Trade, which were owned by Tsereteli, as a loan without providing anything in collateral, while on the same day, the money was placed in the private bank accounts of Khazaradze and Japaridze, adding that in October-November 2008 the companies were given one more year to cover the loan.

Transparency International (TI) Georgia, a local watchdog, stated that monitoring of case files and the trials, it was clear the case was ‘unambiguously politically motivated.’ The NGO argued the investigation could have served to punish opponents of the GD government and halt the Anaklia Deep Sea Port project, a joint venture of TBC Holding and a U.S. investor under a consortium.