Georgia takes over Ivanishvili's Cartu Bank

By bne IntelliNews July 12, 2012

bne -

The Georgian state has taken control of Cartu Bank, which belongs to the leader of the Georgian Dream opposition coalition, and the richest man in the country, Bidzina Ivanishvili.

Prompted by Ivanishvili's refusal to pay a GEL74.32m ($50m) fine imposed in June for allegedly violating party funding rules, the state tried to auction off stakes of 100% in Cartu and 21.7% in Progress Bank earlier this month. However, after abandoning the sale on July 10 after receiving no bids, the National Bureau of Enforcement has formally taken control of both banks and will put them under forced management.

Ivanishvili has sold numerous assets as he launches his political career, and says that he is no longer a beneficial owner of Cartu Bank, which he handed over to his eldest son Uta. The billionaire is emerging as a serious challenger to President Mikheil Saakashvili ahead of elections due next year.

He spoke on July 10 to the youth wing of the Georgian Dream - Democratic Georgia coalition, criticising Georgia's political life for being based on "the ideology of one person" - a clear reference to Saakashvili, whom he called "a professional liar." He has claimed that the fine is politically motivated and that he intends to challenge it in court.

The starting prices in the failed auction were GEL75.94m for the Cartu Bank stake and GEL1.78m for Progress Bank. "Forced management implies appointment of a manager of the property which is under enforcement," the National Bureau of Enforcement said in the statement, adding that income received during the forced management regime will be used to cover debt to the state.

The statement also says that while the debtor will remain owner of the property, the "new manager" will enjoy "all the rights of owner until termination of the forced management regime."

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