The “AYFB:” Alienation of the “People’s Bank” shares was illegal

    The “Association of Young Financiers and Businessmen - AYFB” calls on the Prosecutor’s Office to consider the questions, related to the possible criminal activities of the Head of the country’s main financial institute! Banking system is one of the best functioning systems operating in Georgia, forming 90% of assets of the financial sector. Accordingly, the country’s economy largely depends on the banks. In order to avoid impeding successful functioning of the sector, questions about the Head of the financial regulatory authority should not exist.

    Illegal alienation of the “People’s Bank” shares is one of the questions, associated with the name Kadagidze, as the Head of the Financial Supervisory Agency. In particular, by December 29, 2008, in accordance with the Organic Law of Georgia on the National Bank of Georgia, Georgian Financial Supervisory Agency was the only institution supervising financial sector.

    According to the Vice-president of the “AYFB”, Shota Gulbani, the case is about the purchase of 89% package of the “People’s Bank” shares by the offshore company “Euro Oil”. _ “ As it became clear, this company was founded within the offshore zone in United Kingdom, having no relevant experience for conducting activities related to the banking and financial sector. As you know, the Financial Supervisory Agency was entitled and obliged to control alienation of the shares of the commercial banks. Giorgi Kadagidze was the Head of the Agency at that time. In the Law on the National Bank, it is stated, that anyone purchasing shares of the commercial banks, exceeding 10, 25 or 50 % of the bank’s capital, is obliged to complete and submit the declaration of eligibility to the National Bank of Georgia, where detailed information about the purchaser is represented. Within one month, after submission of the declaration, the National Bank notifies the declarant of the approval or the refusal of the operation. However, according to our information, the offshore company “Euro Oil” has never submitted such declaration of eligibility to the Financial Supervisory Agency during the alienation of the “People’ Bank”, that naturally raises the question, whether the violation occurred or not.” Stated Gulbani.

    According to him, it is clear, that the responsibility lies with the Head of the Financial Supervisory Agency, yet, both, the Government and the Prosecutor’s Office prefer to keep silence so far. “It is important to note, that the resolution on the recognition as a victim is formed by the Prosecutor of the Investigation Department of the Ministry of Finance. The resolution clearly states, that alienation of the “Peoples’ Bank” shares, was carried out in violation of legal procedures on behalf of the National Bank officials, as confirmed by the testimonies of the shareholders.” Noted Shota Gulbani during the briefing, held at the information agency “Pirveli” press-club.