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Tbilisi Mayor Ugulava Faces Criminal Charges
Civil Georgia, Tbilisi / 22 Feb.'13 / 20:45

Criminal charges will be filed against Tbilisi mayor, Gigi Ugulava, over misspending of “large amount” of state funds and “legalization of especially large amount of illegal income”, Finance Ministry’s Investigations Service said on Friday.

The agency, which is in charge of probing into economic crimes, said that Ugulava had been summoned to appear before investigators on February 23 to formally file charges against him, as well as to carry out other, unspecified, “investigation measures”.

The Investigations Service also said that charges were related to two separate cases.

One is related to “a criminal scheme of seizure of Imedi TV” in 2008, which is also related to the case of Tbilisi municipality’s Rike deal, the Investigations Service said.

It said that another case was related to misspending of GEL 4.1 million of public funds by creating hundreds of fictitious job positions in a municipal service through which funds were channeled to pay salaries of UNM party activists.

The Investigations Service said that in 2008, when Imedi TV’s controlling shares were owned by Joseph Kay, a distant relative of late tycoon Badri Patarkatsishvili, founder of this TV station, “then defense minister Davit Kezerashvili met Kay and through direct threats convinced him to relinquish [his ownership] of the Imedi TV on the condition that Gigi Ugulava would have reimbursed USD 10 million”, which Kay had spent on TV channel’s operations.

The Investigations Service claims that Ugulava schemed Rike deal for the purpose of obtaining USD 10 million state funds and covertly transferring it to Joseph Kay.

The Investigations Service launched probe into sale and then buying back of over four hectare plot of land, known as Rike, in downtown Tbilisi by the capital city’s municipality in December 2012. Tbilisi city municipality sold 43,350 square meters plot of land on Rike for USD 7 million to a private company New Rike; in late 2008 the Tbilisi municipality bought back from the same company the same plot of land for USD 17 million. Finance Minister Nodar Khaduri said in December that the case was about “wasteful spending” of taxpayers’ GEL 10 million.

The Investigations Service said on February 22, that in late 2008 Tbilisi mayor Gigi Ugulava made a deal with owners of New Rike company on buying back plot of land on Rike for USD 17 million, but New Rike should have transferred funds to an offshore company controlled by Joseph Kay. After selling plot of land on Rike to the municipality, New Rike transferred USD 8.81 million to Kay’s offshore-registered entity, the Investigations Service said, adding that the deal represented seizure of Imedi TV through “misappropriation of state funds and money laundering” scheme.

About two weeks after the October 1, 2012 parliamentary elections Imedi TV, which was run by President Saakashvili’s long-time ally and former government member Giorgi Arveladze, was transferred in ownership to late tycoon Badri Patarkatsishvili’s family. The television station is now wholly owned by widow of Patarkatsishvili, Ina Gudavadze.

In another case over which Ugulava will be charged is related to allegations by the Investigations Service that in a course of two years total of 764 people, who were UNM activists, were fictitiously employed in Tbilisi municipality’s waste management service, receiving salaries, total of GEL 4.13 million, from capital city’s budget, but in fact performing various activists for UNM party.

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