GEO

Commercial activities of Batumi City Council members

17 March, 2015

 

Transparency International Georgia continues to study the commercial activities of members of local government representative bodies. In May 2014 we published a report on commercial activities of the previous composition of council members (and their family members) of the self-governing city of Batumi. This time we present information on Batumi City Council officials elected through majoritarian and proportional rules during the 2014 local government elections.

Our report revealed that:

  • According to the registry of entrepreneurs and non-commercial legal entities, several members of Batumi City Council are to this day involved in management of limited liability companies in violation of Article 13 Paragraph 4 of the Law on Corruption and Conflict of Interest in the Public Service.
  • Several city council officials have not included their commercial activities in their asset declaration forms, a violation of Article 15 Subparagraph ‘i’ of the Law on Corruption and Conflict of Interest in the Public Service.
  • Companies connected to Batumi City Council members and their family members have not taken part in electronic government tenders.
  • Administrative bodies have signed direct state procurement contracts with a joint stock company associated with city council member Davit Tedoradze.
  • City council members are not obligated by law to file asset declaration forms (except the chairperson, deputy chairpersons and commission chairpersons). This means that information about their commercial activities is less available.

Here we present information about those members of Batumi City Council, who, according to the Public Registry, manage or hold shares at various companies:

Irakli Cheishvili, Chairman of Batumi City Council (Georgian Dream)

According to the Public Registry, Irakli Cheishvili to this day is the director and a 50% shareholder of H and M Ltd.. The other 50% is owned by another council member Levan Kintsurashvili. The company was registered on September 13, 2010 and is involved in import, distribution and sale of textiles.

Cheishvili did not indicate his connection with H and M Ltd. in his asset declaration filed on September 15, 2014. This is a violation of Article 15 Subparagraph i of the Law on Corruption and Conflict of Interest in the Public Service. According to the subparagraph, an asset declaration must contain complete and accurate information about an official’s participation in commercial activities and income received from it.

In an interview with newspaper Batumelebi on July 2014 Cheishvili stated that the company had failed to work. This, however, does not release the council chairman from the legal obligation to report these commercial activities in his asset declaration. According to Article 13 Paragraph 8 of the Law on Corruption and Conflict of Interest in the Public Service, Cheishvili was also required to resign from the position of company director within 10 days of assuming office.

The official website of Batumi City Council does not contain biographical information (curriculum vitae or resume) about Irakli Cheishvili. As a result, citizens are unable to view or assess his track record and determine if the official’s experience matches his position.

Levan Kintsurashvili, Chairman of Batumi City Council Legal and Procedural Issues Commission (Georgian Dream)

Levan Kintsurashvili, a political and business partner to Irakli Cheishvili, was elected to Batumi City Council through the majoritarian system. He is a member of the Georgian Dream Coalition and chairman of the legal and procedural issues commission.

Public Registry data reveals that Kintsurashvili is the director and a 100% shareholder of Tiflis Development Adjara Ltd. registered on July 3. Until August 6, 2008 Tiflis Development Adjara was registered under the name of Kalaki Batumshi.

Like the city council chairman, Kintsurashvili also did not indicate his 50% ownership of  H and M Ltd. in his asset declaration. He also did not declare his involvement with Tiflis Development Adjara.

In an interview with newspaper Batumelebi Kintsurashvili stated that Tiflis Development Adjara had ceased its activities. As chairman of a city council faction and as a public official he nevertheless is required to resign from being a company director within 10 days of assuming office.

Tengiz Apkhazava, Chairman of Batumi City Council Financial and Economic Development Commission (Georgian Dream)

Tengiz Apkhazava is the chairman of Batumi City Council Financial and Economic Development Commission. To this day he is the director of J-Pundamenti Ltd. and the founder and a 100% shareholder of ST LOGISTICS Ltd. .

On January 9, 2015 Apkhazava resigned from being the director of ST LOGISTICS but still remains its full owner. At present, the company's director is his son Tornike Abkhazava.

Public Registry data reveals that Tengiz Abkhazava to this day remains the director of J-Pundamenti, which is a violation of law.

Unlike Irakli Cheishvili and Levan Kintsurashvili, Apkhazava has indicated his connections with these companies in his asset declaration filed on September 17, 2014. The declaration also shows that he did not receive any income from commercial companies in 2013.

Davit Tedoradze (Davit Tarkhan Mouravi - Patriotic Alliance of Georgia)

According to the Public Registry, Batumi City Council member Davit Tedoradze is the director of JSC Adjara Publishing registered on June 7, 1996.

Adjara Publishing has not participated in electronic government tenders. It has, however, received 13 direct state procurement contracts from various administrative bodies in Adjara from March 2012 to January 2015. The company has received a total of GEL 51,447 from direct state procurement. The largest contract was signed with the Ministry of Education, Culture and Sport of the Autonomous Republic of Adjara on July 25, 2012.  According to this contract, Adjara Publishing would have to edit and publish the fourth volume on the history of south Georgia. The company has received the largest number of direct state procurement contracts from Batumi Emergency Medical Center Ltd., which is fully owned by Batumi City Hall.

Davit Tedoradze is not an official and, therefore, is not prohibited from engaging in commercial activities. Nor is he obligated to file asset declarations, meaning that information about his income from commercial activities is not publicly available.

Tamaz Turmanidze, Faction Chairman (Georgian Dream)

Chairman of the Georgian Dream faction at Batumi City Council Tamaz Turmanidze is the director and a 50% shareholder of Expert Group Ltd. registered on January 21, 2008. The company is mainly engaged in construction, architectural planning, and design as well as import and sale of construction materials.

Like his colleagues in the city council, Turmanidze has publicly stated that his company has ceased activities since 2008. According to the Public Registry, however, the company is still operational. Therefore, as a council official, Turmanidze was still obligated by law to resign from being a company director.

Turmanidze is also a 30% shareholder of Solo Group Ltd. registered on December 6, 2012. The company is primarily involved in advertising, design and programming. According to information available on the State Procurement Agency's website, 4 months after registration on April 18, 2013 Solo Group received a direct state procurement contract on building a website for a legal entity of public law (LEPL) Nodar Dumbadze State Central Children’s Theatre. The theater would have to pay GEL 3,200 for the service, but on May 4, 2013 the contract was canceled due to violation of terms from Solo Group.

Tamaz Turmanidze also owned 100% shares of ITD Holding Ltd. , but on February 27, 2013 he transferred the ownership to his wife Shorena Bolkvadze.

Giorgi Kakabadze (Salome Zurabishvili - Georgia's Way)

Member of Batumi City Council Giorgi Kakabadze is the 100% shareholder of RSR Ltd.. The company is involved in trade and was registered on August 8, 2008 with a starting capital of GEL 50 thousand.

Until July 17, 2014 Kakabadze was the director and a 100% shareholder of GK Group Ltd. registered on May 20, 2013. According to the Public Registry, on November 13 of the same year Kakabadze transferred his shares in this company to his father Guram Kakabadze free of charge. The company changed its name on February 25, 2015 to Energy Drink.

The council member held 100% shares in another company San-Fa Ltd. . Registered on August 11, 2008 and involved in trade, the company's starting capital was GEL 50 thousand. As in case of Energy Drink, Giorgi Kakabadze transferred his ownership of San-Fa to his father on November 13, 2013.

Guram Kakabadze, father of the council member, is also a director of XXL-001 Ltd.. Registered on May 25, 2011 the company is involved in construction and repair works as well as sale, renting, and leasing of real estate and movable property.

Giorgi Kakabadze is not an official and, therefore, is not prohibited from engaging in commercial activities. Nor is he obligated to file asset declarations, meaning that information about his income from commercial activities is not publicly available.

Ramaz Surmanidze (Unity Hall)

Ramaz Surmanidze owns 60% shares in Batumi Medical Ecology Institute Ltd. registered on September 24, 1996. According to the Public Registry, the company is involved in a wide range of activities including research and education as well as commercial activities. Like Giorgi Kakabadze, Surmanidze is not an official and is not obliged to file asset declarations.

Compared to the 2014 report, there has been a considerable decrease in the number of direct state procurement contracts granted to companies related to Batumi City Council members and their family members by administrative bodies in Adjara. In addition, none of the companies mentioned above have participated in electronic government tenders.

However, filing incomplete asset declarations by city council members still remains a problem. This problem suggests that some members of this representative body disregard legal regulations.

We call on the Civil Service Bureau to immediately demand relevant officials make changes to their asset declarations based on specific violations discussed in this report.

Transparency International Georgia has been arguing for the expansion of the list of public officials required to file asset declarations. According to existing regulations, only the city council chairperson, deputy chairpersons, and faction chairpersons are required to file asset declarations. City council members are free to engage in any commercial activities while making important decisions about budget spending, which clearly raises risks for potential conflicts of interest.

Author: TI Georgia