Tbilisi City Court ruled on August 10 to fine retired footballer, Kakha Kaladze, who is running for a seat in parliament as a candidate for Bidzina Ivanishvili-led Georgian Dream coalition, with GEL 16,944,960 (about USD 10.3 million).
In addition the court has also approved a motion from the State Audit Office (SAO) to impound Kaladze’s assets, including in Kala Capital, a company which owns, among other assets, 78.21% shares in Tbilisi-based Progress Bank (the rest is owned by Ivanishvili).
Kaladze’s other impounded property also includes his nine vehicles of various types, involving several luxury cars (among them one Rolls-Royce). According to his lawyer the most expensive among impounded cars is valued at about USD 200,000.
The financial penalty is five times the amount of GEL 3.33 million, which the State Audit Office alleged could have been used by Kaladze illegally for his and the Georgian Dream coalition’s political activities.
Kaladze, who won the Champions League on two occasions with AC Milan, said he would not pay the fine.
“I am not going to pay this fine, because I have done nothing illegal,” Kaladze told Maestro TV on August 10.
Before referring the case to the court, SAO, which is also in charge of monitoring political finances, told Kaladze to return by August 9 back to his bank accounts GEL 3.33 million in cash which he had withdrawn this year.
SAO said that Kaladze refused to provide documented information about spending of withdrawn cash, which triggered reasonable suspicion that the cash was used for political activities in violation of party funding rules. SAO said that it had the right to request from Kaladze information about spending as ex-footballer now has declared electoral goals.
Kaladze’s lawyer argued during the court hearing that there was no legal basis for SAO to demand from Kaladze to inquire into his spending or to demand return of cash back to his bank account. The lawyer said, that although Kaladze had declared his intention to run for a majoritarian MP seat in his native Samtredia single-mandate constituency, he was not yet formally registered as an MP candidate with the Central Election Commission. His lawyer also said that out of GEL 3.33 million, GEL 214,000 was withdrawn in cash by Kaladze for his personal use and the rest was given by the ex-footballer to his father, Karlo Kaladze, as a gift.
The lawyer also said that it was “comical” when the state audit agency demanded from Kakha Kaladze to return the sum back to his bank account, because at the time Kaladze’s bank accounts had already been frozen by the authorities and he could not have done it even if he wanted.
In late July the authorities froze Kaladze’s Georgian bank accounts as part of an ongoing investigation into “alleged legalization of illegal income i.e. money laundering”.
Bidzina Ivanishvili, leader of the Georgian Dream opposition coalition, has also been told by the State Audit Office to return back to his bank accounts USD 2,918,500; GEL 735,189 and EUR 700 in cash, which he had withdrawn from his personal bank accounts this year.
“Of course Bidzina Ivanishvili has not done it because there is no legal provision whatsoever that would obligate him to return the money back to his accounts,” Ivanishvili’s lawyer, Alexander Baramidze, said.
It is not yet clear whether the State Audit Office will resort to the same measure like in Kaladze’s case and request the court to fine Ivanishvili with the five times the amount of the sum in question.
In case of Ivanishvili, the total amount of money, withdrawn in cash from his bank account, is equivalent to over GEL 5.5 million and if his case goes to court Ivanishvili may potentially face about GEL 55.2 million fine.
This amount of fine will be calculated under the provision of the law which says that the financial penalty should be five times the sum in question (that is GEL 27,607,645), but if it is not the first time when violation is committed by a same person, the amount of fine (in this case GEL 27.6 million) should be doubled.
Ivanishvili has already been fined for alleged violation of party funding rules; in June USD 48 million financial penalty was imposed on him, which he initially was refusing to pay, which led to seizure of his banking assets in Georgia. In July he paid USD 48 million fine and said that he did so because he wanted to contribute to relief efforts for disaster-hit provinces.