Neqsol Holding, a shareholder of Georgian internet provider Caucasus Online, is going to sue the Georgian government in the International Court of Arbitration for appointing a special manager to the board of Caucasus Online, who has been given the authority, amongst other things, to dismiss directors, members of the supervisory board and employees of the company, and suspend or restrict its right to distribute.
Georgian National Communication Commission (GNCC), the regulatory body overseeing broadcasting and electronic communications, appointed Mariam Sulaberidze, currently director of state-sponsored programme Open Net and former employee of GNCC, as the special manager to Caucasus Online on October 1, 2020.
The decision made by the Communications Commission follows the 2019 purchase of a 49 per cent stake in Caucasus Online for $61 million by NEQSOL Holding.
The GNCC stated that the deal was not agreed upon with the commission in advance, therefore initiating punitive actions against Caucasus Online. It demanded that the company reverse the transaction and restore the pre-sale status quo. According to the decision of the commission, a special manager has been appointed until 49 per cent of the alienated share of the company is returned to its original state.
Head of Strategy at Neqsol Holding Teymur Taghiyev said that 'we are confident' that the change in beneficial ownership of Caucasus Online complied with all legal and procedural obligations under applicable Georgian law, and have made every effort to explore all possible resolutions to this dispute.
However, the government of Georgia has inexplicably remained determined to undermine the development of Caucasus Online and of Neqsol’s wider digital infrastructure project, in which it planned to integrate the Georgian provider. The government of Georgia has for months been breaching its obligation to treat Neqsol’s investment fairly and equitably, and has now expropriated it, despite our commitment to Caucasus Online, and to the development of Georgia as a digital hub in the Caucasus", Taghiyev said.
Taghiyev added that he hoped to resolve this issue through negotiations, but 'our efforts have been in vain'.
GNCC is authorised to appoint special managers to companies after the Parliament endorsed controversial amendments to Law on Electronic Communications on July 17, which triggered criticism from civil society organisations and telecommunication companies alike.