Institute for War and Peace Reporting | Giving Voice, Driving Change

Georgian Businessmen Fight for "Stolen" Property

Last government accused of wrongful seizures of business assets.
By Nino Gertsmava

Georgian businessmen who accuse the last government of stealing their property have united to demand that the new administration return it.

The prosecution service is currently examining some 200 cases in which the government of President Mikhail Saakashvili’s United National Movement, UNM, which lost power in an October election, is accused of unlawful confiscation of business assets. Another 500 cases brought by businessmen are awaiting review.

Parliament, now controlled by Prime Minister Bidzina Ivanishvili’s Georgian Dream coalition, has established its own commission to look into the claims.

“If the courts establish that property was removed unlawfully, the true owner will have the right to reclaim it,” speaker David Usupashvili, who is one of the leaders of Georgian Dream, said. “Unlike in the days of the UNM, the legality of confiscations will be ruled on by fair courts.”

The businessmen pressing claims include Gogi Topadze, owner of the Kazbegi beer company.

A Georgian Dream member himself, he accuses a group linked to the last government of harassing his business to the point of closure.

“A few years ago, members of the Kmara youth movement attacked shops so as to scare their owners, telling them not to sell Kazbegi beer or else the financial police would check up on them. As a result of this terror, you won’t find Kazbegi beer in most of the shops,” Topadze said. “As a result of this pressure, the company lost the local market.”

The businessmen’s allegations are directed at the UNM, the justice and economy ministries of the time, the prosecution service and the mayor of Tbilisi.

Former officials have largely refrained from commenting on the claims, leaving it to Saakashvili – who remains in office until next year – to defend their record.

“The government always served business in Georgia, as well as the prosperity of our people and the future of our children,” he said.

The president pointed to the World Bank’s Doing Business rating for last year, in which Georgia rose from 21st to 9th place.

“This is one of the best ratings in the world,” he said. “It means there isn’t any corrupt pressure on Georgian businesses. We did everything to ensure business in Georgia was free.”

The businessmen who have formed a group called Project Return disagree with the president.

“Project Return will defend the interests of businessmen whose property has been taken illegally, and will strive to unite these people to defend their interests,” said Mamia Sanadiradze, who founded the group.

Sanadiradze says property rights were frequently violated under the previous government.

“I’ve held consultations with lawyers, and it turns out that regaining property is a difficult process,” he said. “As a result, we decided to join forces in defence of our interests. We will try to find mechanisms for returning assets to the legal owners as soon as possible.”

Until 2009, Sanadiradze owned 80 per cent of Caucasus Online, one of the country’s biggest internet providers. After having large fines imposed on him, he sold half the company and moved to the UK.

He now owns 30 per cent of the company, but since returning to Georgia after the October election, he says he wants only justice, not to regain a controlling stake.

Prime Minister Ivanishvili says the number of lawsuits being brought are a sign that his government is starting to restore justice.

“The hysterical complaints from our opponents will not stop the processes now going on in this country. One of our main pledges was to restore justice – and this is now taking place, and it will be completed,” he said. “The authorities should not interfere in private business. We will do all we can to make sure that private business is completely secure.”

Lia Mukhashavria, head of the non-government group Article 42, says the businessmen will need more than government backing to reclaim their assets.

“Illegal confiscation of property is one crime, but when you talk about returning confiscated property, it raises questions about the rights of those who subsequently obtained this property by legal means,” Mukhashavria said.

Lawyer Dmitri Gabunia agreed, saying that current laws do not automatically provide for property to be returned to its original owners even if the confiscation was based on a coerced confession or agreement.

One major case has already been resolved – that of broadcasting company Imedi, launched by Badri Patarkatsishvili in 2003. When he died in 2008, a distant relative assumed ownership of Imedi, and the company was run by Giorgi Arveladze, a long-term Saakashvili ally. Ownership has now reverted to Patarkatsishvili’s family.

Nino Gertsmava is an IWPR-trained journalist.


More IWPR's Global Voices