Chair of largest bank in Georgia resigns amidst struggle with authorities
Mamuka Khazaradze, the chairman of one of Georgia’s largest private banks, TBC Bank, has announced his resignation on Facebook.
Khazaradze said that the TBC Bank Board of Directors had decided to end the feud with the National Bank of Georgia to avoid harm to the bank, its shareholders and clients.
“Accordingly, I decided to leave the bank where I have spent 27 years of my life. [I have left the bank] which I created with $500 and which I made the largest player in the region with my team,” Khazaradze wrote, adding that he hoped the decision would have a positive impact on the future development of the bank.
“I plan to focus all my energy towards … the construction of the Anaklia port. I hope that I will have the opportunity to finish the job.”
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Mamuka Khazaradze’s TBC Group, which includes TBC Bank, is the co-founder of the Anaklia Development Consortium. The consortium in Anaklia is implementing the first deep-water port in Georgia, which many consider the most important infrastructure project currently being implemented in Georgia.
It is often compared with the Baku-Tbilisi-Ceyhan oil pipeline project which was started back in the Shevardnadze era (until 2003).
The port will open the export route for cargo from Central Asia to Europe and vice versa.
The deep-water port hopes to compete with Turkish ports as well as ports of other states in the region. The project will require about $2.5 billion in investments.
It is still unknown who will assume the position of head of the bank after the departure of Khazaradze.
Khazaradze’s resignation comes in the wake of a case brought against the co-founders of TBC for a transaction made more than 10 years ago.
TBC Bank serves nearly two million people. It was founded in 1992 and today has become the number one bank in Georgia in terms of assets, and is the market leader in the retail deposit segment. Together with subsidiaries, TBC Bank employs about 7,000 people.
The chief prosecutor’s office of Georgia claims Mamuka Khazaradze and his deputy Badri Japaridze were involved in laundering $17 million. Khazaradze denies all charges.
The National Bank later got involved in the case and demanded that Khazaradze and Japaridze leave their posts within two months.
The opposition and observers see a political motive behind the case and connect it with the interests of the former prime minister and leader of the ruling Georgian Dream party, billionaire Bidzina Ivanishvili.
Ivanishvili himself has publicly criticized Khazaradze several times and expressed dissatisfaction with his activities.
A broken system
Georgian analyst Gia Khukhashvili – a former adviser and close acquaintance of Ivanishvili – says that in resigning, Khazaradze is trying to save the bank he created.
“We must understand why he made this decision and what the final straw was, and we must diagnose what is happening with the country because this is no longer a personal problem of Khazaradze. It has turned into a systemic problem related to state development, the investment environment, interest groups and the rule of law in general,” Khukhashvili says.
One of the leaders of the opposition party European Georgia and the former mayor of Tbilisi, Gigi Ugulava, believes that Khazaradze made the right decision. However, Ivanishvili has achieved his goal.
“Ivanishvili achieved his aim: he forced Khazaradze to back down and forced him to justify himself and prove that he was not a camel. The criminal case will hang over him. The result is that the image of the country has suffered. The feeling of total hopelessness and lawlessness has become even deeper,” Ugulava wrote on his Facebook page.