TBILISI, DFWatch – If the managers of Cartu Bank won’t keep out of politics and get its house in order, the National Bank will take it over.
Giorgi Kadagidze, president of the National Bank, said this Thursday at a session of the parliament’s finance and budget committee.
Cartu Bank is owned by Bidzina Ivanishvili, the Georgian businessman who October 7 declared he would enter politics. Four days later, the president revoked his citizenship, and then, on October 18, a Cartu Bank money transport carrying 2 million dollars and one million Euros from the Bank of Georgia was raided by police.
Later the government explained that it was an operation money laundering, but the Cartu Bank management claims the cash was cash reinforcement between banks, and part of the normal operation of banks. The National Bank then began an audit into Cartu Bank, which is not yet completed.
Cartu Bank president Nodar Javakhishvili claims that the public services have halted all contracts with the bank and closed their accounts.
Despite the numerous questions raised in the time since, no answers have been forthcoming. In addition, Nodar Javakhishvili says he has been intensively requesting to meet the president of the National Bank for the last month, to no avail.
The reason the National Bank president testified in parliament Thursday is that he was summoned there after Javakhishvili asked the parliamentary faction Unity for Justice to have him come and explain what is going on. Parliamentary regulations oblige the government and all public servants who are appointed by parliament to appear in parliament when called for.
The faction Unity for Justice asked the National Bank president to come two weeks ago, provided that Javakhishvili could set a time when he would be able to appear. The faction session was scheduled for 13:00 of November 17. But late at night on November 16 there was scheduled a session of the parliament’s finance and budget committee, at which the National Bank president was required to attend regarding a new bill. Therefore, Kadagidze wasn’t able to come to the faction’s session.
Faction members stated that the committee session was scheduled at the same time as the faction’s session on purpose, so that Kadagidze wouldn’t be there to answer their questions. Finally, committee chairman Zurab Melikishvili agreed that the faction members and guests of the faction would be given the opportunity to ask questions to the National Bank president during the committee session. But members of the majority objected to this.
Faction chairman Giorgi Tsagareishvili expressed interested in where the investigation currently stands regarding the alleged money laundering at Cartu Bank.
He asked whether it was possible to substantiate that the reinforcement operation was in fact an attempt at money laundering, considering that the money had been cleared with several of the world’s leading banks: Deutsche Bank, Trans Company, Citibank and in the second case with the Commerzbank. The cash was transferred from Bank of Georgia, towards which there is no ongoing investigation.
According to Tsagareishvili, in order to be in instance of money laundering, the money in question needs to have a criminal origin, which means connected with illegal weapons, drugs or other criminal activities.
“If the clearing money had a criminal origin, there should be complaints against New York and German banks and this has to be directed to appropriate monitoring services. If there are suspicions about the origin of the cash, then complaints should first be directed towards Bank of Georgia.”
“Moreover, as far as I know there has not been mentioned the color of money in the questions put to Cartu Bank, so the origin was not recorded,” Giorgi Tsagareishvili stated.
He proceeded to ask where the investigation currently stands. Based on the responsibility of the banking system to maintain stability, he thinks that the National Bank as an institution should be interested in this process.
Before Kadagidze could answer, several majority parliamentarians and members of the finance budget committee who never previously had attended sessions of this committee started shouting that the members of fraction Unity for Justice were out of order. Majority representative Vakhtang Balavadze with raised voice appealed to Tsagareishvili from his seat: “You haven’t been taught about banking issues at the ‘Gaishnik’ school and it’s better for you not to say anything.” Giorgi Tsagareishvili was working at the traffic police in 1990s, which was called as ‘Gai’ for short. After he became member of parliament, majority members remind him about this to humiliate him.
National Bank president Giorgi Kadagidze, of instead of answering the question, blames Nodar Javakhishvili, Cartu Bank president, for politicizing the bank.
“If the bank leadership won’t get things in order in this regard, then the National bank will do it,” he said.
“How normal is it and in which civil country does it happen, that a commercial bank’s activities are to support political groups? Name at least one example from international practice, when the management of a commercial bank makes political statements and comments on speeches by political leaders. Name a commercial bank, whose chairman carries out the functions of political party! Name at least one bank, which spreads false information about the national bank or any financial institution. Name one specific example from international practice, when a commercial bank names its client’s identity and spreads information about business secrets. Name one example, when a commercial bank is dragging out the audit process on purpose,” Kadagidze stated, and directed all these accusations towards Javakhishvili.
On the same note, the National Bank president reminded the attendees of events from the beginning of the 90s and accused Javakhishvili of returning the bank sector to those conditions.
According to him, the main goal for the National Bank is financial support. Towards this aim it’s important for the banks and the financial system to be as non-politicized as possible.
Javakhishvili answered that it’s not difficult to find out who begun politicizing this issue.
“The attack on a bank owned by Bidzina Ivanishvili a few days after his political statements – was this politicization done by Ivanishvili and Nodar Javakhishvili? I want to remind Giorgi Kadagidze and all the others that I was not at Cartu Bank at that time. What was I politicizing when they took legal money from the bank’s premises? Today there hasn’t even been mention of money laundering, despite this being a criminal case. How did it happen that the bank was transferring black money from the bank’s premises and the bank from which the money was taken, wasn’t asked any questions, but the bank who took the money is held responsible? We asked for two million dollars and one million Euros, and if it gave us black money – then why is that my responsibility? It’s funny when we discuss the blackness of the money taken from the bank,” Javakhishvili remarked.
When it comes to the criminal investigation into illegal income legalization, Kadagidze said this issue is up to law enforcement to handle.
The National Bank president accused the management of Cartu Bank of dragging out the audit on purpose. Javakhishvili vigorously denied.
According to Nodar Javakhisvhili, the National Bank is planning to somehow take Cartu Bank into temporary administration, and that is the reason why the National Bank is insisting that Cartu Bank is sabotaging its activities.
“We haven’t refused any request, except for that we are asked to turn on the technology in their computer – National Bank is telling me this. They requested information regarding Ivanishvili’s charity, and we see it in the newspaper in the evening. They say to turn on the technology – when no law obliges me to. Moreover, I’m telling you that I’ll show you everything – here the technology begins, see, watch how the documents are being prepared and what products are being made” Javakhvishili said.
According to his statement, an audit doesn’t mean to control ongoing activity.
“Since the day they came, they have been demanding a preliminary agreement on each operation. This is not an audit,” the Cartu Bank president said.
Majority representatives defended the government’s position with phrases heard earlier: that Ivanishvili is a vehicle for Russian ideology and is intervening in the Bank’s policy.