Prosecutor’s Office to appeal court qualification in former Rustavi 2 channel Director sentencing

The Prosecutor’s Office of Georgia has said it will appeal the Tbilisi City Court’s decision to change the qualification in its sentencing of Nika Gvaramia, the founder of the Mtavari Arkhi channel and former General Director of the Rustavi 2 channel, after the delivery of the verdict on Monday.

Gvaramia was found guilty of causing a ₾6,763,509 ($2,239,572/€2,151,266) damage to Rustavi 2, with the prosecution seeking charges for misappropriation or embezzlement against him. In its sentencing of Gvaramia to three years and six months in prison, the Court changed the charges to abuse of powers.

The Prosecutor’s Office will now seek to appeal the decision to change the article of the charge, and has released a statement detailing the case. In the comments, it has noted the acquittal of Gvaramia of charges other than the Article 220 of the Criminal Code, which deals with abuse of powers.

It also acknowledged similar changes in the qualification of charges against Kakhaber Damenia, the former Financial Director of Rustavi 2, who was found guilty of causing a ₾6,763,509 ($2,239,572/€2,151,266) in damages to the TV company. The Office said the Court had “fully shared” the former’s evidence in the charges, but rejected the prosecution's legal qualification, and selected abuse of power in an entrepreneurial organisation under the same Article 220, instead of Article 182 for misappropriation or embezzlement, as requested by the prosecution.

Zurab Iashvili, the Director of Inter Media Plus, was sought for indictment for commercial bribery and forgery in the case, but was acquitted by the Court.

“We would like to remind the public that Nika Gvaramia was accused of embezzling a large amount of property rights belonging to Rustavi 2 broadcasting company, commercial bribery, making and using a forged official document, legalising illegal income and abusing his authority in an entrepreneurial organisation. Kakhaber Damenia was accused of illegally embezzling a large amount of property rights belonging to the broadcasting company Rustavi 2. Zurab Iashvili was accused of commercial bribery and making and using a forged official document,” the statement of the Office of the General Prosecutor of Georgia noted.

Details of the case, as presented by the Office, showed Gvaramia signing a deal on behalf of Rustavi 2 with Inter Media Plus on January 16, 2015 to grant the latter company rights to commercial advertising on the channel.

The Prosecutor’s Office said between January-August 2015, Gvaramia had claimed 90-95 percent of the total revenue from the sale of the advertising time to Inter Media Plus, leaving the remaining amount to the latter company in exchange for the services rendered.

After former owner Kibar Khalvashi filed a lawsuit in court for the return of Rustavi 2 shares to him on August 5, 2015, Gvaramia and Damenia “blatantly disregarded the interests of Rustavi 2 Broadcasting Company” and began requesting from Inter Media Plus “only the minimum amount” from the deal “on a monthly basis”, as required for the “subsistence” of the channel, the Office alleged.

The Prosecutor’s Office statement said Inter Media Plus had been due to receive ₾48,014,847 ($15,898,955/€ 15,251,073) from the sale of advertising time on Rustavi 2 in 2015, but was paid only ₾36,467,000 ($12,075,165/€ 11,583,102), an amount that was ₾6,763,509 ($2,239,572/€2,148,466) less than the amount paid for similar services in 2014. The disparity pointed to the damage caused to the channel, the statement noted, through “illegal squandering” of the right to request the latter amount from Inter Media Plus.

In return for benefitting the latter company by his refusal to request the money for Rustavi 2, Gvaramia had subsequently received two residential flats in Tbilisi with a total area of 238.74 square metres through Inter Media Plus Director Zurab Iashvili, the Prosecutor’s Office added.

After illegally receiving the real estate, Gvaramia sold both flats in July and September 2017 - a few months after they were registered to his name - to launder the illegally acquired property and received ₾602 521 ($199,510/€191,240) for the sales, the statement also detailed.

In further cases mentioned in the statement, Gvaramia was accused of signing a deal with Tegeta Premium Vehicles to purchase a luxury vehicle from the company in return for placing its commercials on Rustavi 2 through Proesco Media - a company “related to” the channel.

Signed on February 27, 2019, the contract between Tegeta Premium Vehicles and Proesco Media involved the purchase of a Porsche Macan S vehicle, with the car valued at €76,700 and its actual ownership transferred to Gvaramia and his family, while the latter company remained the formal owner, the prosecution alleged.

It also said although Tegeta Premium Vehicles had “complied in good faith with the terms of the contract” and paid the full advertising value of the contract provided by Proesco Media, the latter, on the instructions of Gvaramia, “substantially reduced” the amounts payable to Rustavi 2 in the deal, thus causing “significant damage” to the media company.

The illegal dealing had led to the acquisition of the expensive vehicle while Rustavi 2 “suffered significant financial losses” between April-July 2019, the statement concluded, with the Prosecutor’s Office noting its intention to appeal the Court ruling.