Trump Organisation scraps Georgian property development

By bne IntelliNews January 9, 2017

The Trump Organisation has decided to scrap a Trump-branded real estate development venture in the Georgian beach resort of Batumi, it confirmed in a January 6 statement. The $250mn, 47-storey property is being developed by Georgia's Silk Road Group. President-elect Donald Trump himself signed the licensing agreement for the building in 2011.

The decision to withdraw from involvement in the Batumi development comes following the holding's December announcement that it would scrap a similar development venture in neighbouring Azerbaijan, and subsequent to Alan Garten, the organisation's general counsel, indicating that the group was set to make the same move in Georgia. 

The organisation has sought to distance itself from some of its more controversial partnerships in countries like Brazil, Saudi Arabia and Azerbaijan in recent months, to protect the incoming president against criticism over possible conflicts of interest and for having selected foreign partners suspected of corruption.

In Azerbaijan, a Trump Tower project was in 2012 leased to Garant Holding, a business conglomerate owned by Anar Mammadov, son of the country's transport minister Ziya Mammadov. Leaked US embassy cables describe Mammadov senior as corrupt even by Azerbaijani standards. Meanwhile, his son's business has a near-monopoly on activities related to the transport sector, such as bus and taxi services in the capital city of Baku, having won a suspiciously high number of government tenders for transport projects.

“[The parties] jointly announce their decision to formally end the development of Trump Tower, Batumi, … under the licence agreement executed in March 2011,” read the statement on the Georgian cancellation.

Silk Road Group, a local conglomerate comprising of transport, telecommunications, banking and real estate operations, would continue to develop the building without the Trump franchise, the statement added.

The deal between the company and the Trump Organisation was mediated by former Georgian President Mikheil Saakashvili, who presents himself as an old friend of Trump's. The outspoken politician, now active in Ukraine after having been stripped of his Georgian citizenship, is also one of the most anti-Russian politicians in the region. In an interview with CNN on January 6, Saakashvili said that Trump is "smart" and would not be "fooled" by Russia's Vladimir Putin; and that he expected him to be forceful in his dealings with Russia, because "that is the only language that Putin understands".

 

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