National Bank of Georgia provides details why it demanded the withdrawal of TBC Bank’s top figures

The National Bank of Georgia (NBG), a supervisory bank in Georgia, has provided details on why it demanded the withdrawal of the TBC Bank founders from the bank’s supervisory council.

NBG says that as a rule it refrains from releasing the information related to its supervisory activities, however, “the lack of information regarding the TBC Bank issue has given a way to speculations and the spread of false information.”

• Price of Georgian TBC Bank stocks on London Stock Exchange increases.

The statement came after the resignation of the TBC Bank’s founders Mamuka Khazaradze and Badri Japaridze, who had stated that an “absurd” investigation regarding the money-laundering has been launched against them and that NBG was not free in its decisions concerning the bank.

 NBG says that it launched inquest regarding the TBC Bank issue based on the information it received on 7 August 2018 from the Georgian Financial Monitoring Service.

Khazaradze (l) claimed that the “absurd” investigation and the statements made by the Chief Prosecutor’s Office before the investigation was over affected the bank’s international shareholders with $200 million and negatively influenced the state economy. Photo: IPN. 

The inquest revealed possible violation of the Interest Conflict Regulatory Law, which was confirmed in the additional investigation carried out by NBG,” NBG says.

The bank claims that in 2007-2008, with the use of LTDs Samgori M and Samgori Trade, Khazaradza and Japaridze took 16.7 million USD loan from the TBC Bank and the same year wrote off the debt.

The NBG says that as the taking of loan took place with the use of companies, it failed to detect the violation during the audit carried out in TBC in 2008.

As the loan was written off shorty, the transaction was not checked during the following audit as well. The TBC Bank was audited before its stocks were placed at the London Stock Exchange. However, for that time the loan was long written off and it is very unlikely it to be found out,” the NBG says.

The NBG says that, therefore, the statements as if once the transaction was detected and the TBC Bank was fined for this were false.

NBG says that as a regulatory bank it is obliged to take necessary and sometimes unpopular steps to address violations and decrease risks in its field.