GNCC candidates – Is there the risk of conflict of interests?
The Parliament has to fill a vacancy for one Commissioner at the Georgian National Communications Commission (GNCC), the telecom and broadcasting regulator. The work and perception of the GNCC leadership in past years has at times been undermined by apparent cases of conflict of interest that were never sufficiently addressed. Thus, TI Georgia decided to conduct basic public record due diligence on these candidates.
President Mikheil Saakashvili, in line with the Law on Broadcasting, has submitted names of three candidates for the vacant Commissioner position to the parliament. The CVs of the three candidates – Teimuraz Ghoghoberidze, Giorgi Choladze and Davit Tutberidze – are not publicly available therefore little is known about their background.
GNCC Commissioners are among the highest paid public servants in Georgia – including bonuses, each Commissioner earned between GEL 210,000 and 295,000 in 2012. Meanwhile, the a parliamentary investigation commission continues to investigate the conduct of the GNCC’s current chairman, who is facing a possible impeachment by Parliament.
The law on broadcasting stipulates that a commissioner cannot be a member of a political party and cannot hold shares or be employed by a company which is regulated or supervised by the GNCC (mobile, telephone and internet operators, broadcasting license holders, cable and satellite operators.) He/she also cannot hold any direct or indirect economic interests in such a company.
The three candidates:
TI Georgia’s 2012 Internet report highlighted that 46.2% of Akhali Kselebi is owned by a Belize shell company, Alpha System Transit Corp, which is under the management of Cascado AG, a shell company registered in Panama. Cascado AG has been associated with a number of scandals, including corrupt Ukrainian state procurement and export deals, and lower-level import-export invoice fraud in Russia and other CIS countries. According to an investigation by the Organized Crime and Corruption Reporting Center and Novaya Gazeta, Cascado AG was also involved in the case of the merchant vessel MV Faina. The ship, sailing under Belizean flag was captured by Somali pirates in 2008, coming from Odessa, with 33 Soviet-made T-72 tanks, grenade launchers and small arms on board, reportedly destined to reach South Sudan, which at the time was under an EU arms embargo.
Alpha System bought the shares in Akhali Kselebi in 2007 from Pridon Injia, a former MP for the Labor Party and a Minister of Communications under President Shevardnadze. Documents from the Georgian public registry indicate that Injia at the time also represented Alpha Systems, and thus might have sold the shares to himself.
Public records also indicate, that Teimuraz Ghoghoberidze held shares in Geocell until 2007. He had acquired 1.3% of the mobile operator in 2006. Ghoghoberidze was apparently involved in the company from the beginning, as he is named as a board member and a director of Geocell in archive documents from late nineties. In 2007, Gurtel (a subsidiary of Teliasonera) purchased Ghoghoberidze’s 1.3% for 3 million USD. 2007 is when also Pridon Injia’s son Ilia Injia and his business partner Avtandil Iashvili also sold their shares in Geocell.
Ghoghoberidze’s wife Lili Sukhitashvili is a shareholder in number of telecommunication companies that are subject to GNCC supervision and controlled by Pridon Injia, his family and associates: Selkomi (6.5%), Akhali Qselebi (4.16%), System Net (2.091%), Foptneti (3.4%).
Teimuraz Ghoghoberidze was a member Parliament, representing Aslan Abashidze’s Aghordzineba block, from 1999 to 2004.
Davit Tutberidze owns 5% and is the director of LTD Caucasian Digital Network, a landline telephony and communications provider which filed for bankruptcy in August. Besides his director position, Tutberidze has maintained a low public profile.
Giorgi Choladze currently is the director of LTD Georgian Media Holding, a company owned by Chemexim International, a Marshall Islands shell company controlled by Robert Bezuashvili, owner of the Georgian Industrial Group and father of UNM Majoritarian MP Davit Bezuashvili and of Gela Bezuashvili (a former Minister of Defense, Foreign Affairs, and acting head of Georgia’s Foreign Intelligence Service) .
The Bezuashvili family formerly owned shares in Rustavi 2, Mze and Pirveli Stereo (directly and through Chemexim International).
Georgian Media Holding publishes the English language publication Business Week. Individuals affiliated with Bezhuashvili-owned companies still own shares in Pirveli Stereo and Mze. Choladze also headed the Georgian Media Union holding (liquidated in February 2013), another company set up by the Georgian Industrial Group to manage media assets at a time the holding was more involved in the Georgian media sector.
Choladze’s and his brother Levan Choladze hold shares in the LTD Air Black Sea. Levan Choladze is the head of the Board of Directors and Director General at the Georgian Industrial Group and held a number of high-level positions in the UNM-government: In 2005, he was the Secretary of the National Security Council and later that year was appointed as the Deputy Minister of Foreign Affairs. In 2007 and 2008 Levan Choladze was the Chairman of the Chamber of Control (now: State Audit Office) and then served as Deputy Minister of Agriculture until 2011.
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