Possible conflict of interests of Kakha Kaladze

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Over the last few days, there has been a discussion in the media and on social networks regarding the business interests of Kakha Kaladze, who has been named as the candidate for the position of the Minister of Energy and Natural Resources by the Georgian Dream coalition which won the 1 October parliamentary elections.

Transparency International Georgia has checked the information concerning the links between Kakha Kaladze and certain companies operating in the energy sector. According to the electronic database of the National Agency of Public Registry (NAPR), as of 2011 Kakha Kaladze was one of the directors and a member of the supervisory board of LLC Kala Capital Limited, registered in Cyprus. LLC Kala Capital Limited owns 100 percent of shares of LLC Kala Capital. The latter is the sole owner of LLC Kala Energy and Natural Resources. According to its charter, the main field of operations of Kala Energy and Natural Resources is energy and natural resources.

Moreover, according to information from the NAPR, in 2011 45 percent of the issued share capital of JSC SaqHydroEnergoMsheni was transferred to Kakha Kaladze. SaqHydroEnergoMsheni is a large company operating in energy sector. It is also noteworthy that LLC Kala Energy and Natural Resources holds 25 percent of shares in LLC TOT Energy, the director of which is Mariam Valishvili, Deputy Minister of Energy and Natural Resources until recently (again raising the issue of conflict of interest).

We do not know if the ownership structure of these companies has changed since it has been registered in the database. However, in any case there is a serious risk that conflict of interests might arise. This issue requires an explanation from the Georgian Dream coalition, and should also become an issue of discussion in the Parliament of Georgia, while the ministerial candidates are being considered in the Parliament.

Furthermore, this case is an example of how the interests of the government have intersected with those of the businesses over the past years, further emphasizing the lack of adequate mechanisms for regulating conflict of interests.

Transparency International Georgia calls on the Parliament of Georgia to give special attention to cases of possible conflicts of interest in the current week while considering candidates for the Government. In the longer term, it should also create relevant mechanisms, compliant with international standards, to ensure the separation of political and commercial interests.

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