EU Ambassador: TBC Developments Impact Georgian Banking Sector

European Union Ambassador to Georgia Carl Hartzell believes that the recent developments surrounding the largest bank in Georgia, TBC, affect the whole banking sector of the country.

“It is an important issue. It affects the stability of the banking sector in Georgia. Consequently, we will continue to keep track of the situation," the Ambassador said.

On February 14, the National Bank of Georgia (NBG) stated that after examining transactions conducted by TBC Bank 2007-2008, it was revealed that Chairman of the Supervisory Board of TBC Bank Mamuka Khazaradze and his Deputy Japaridze had violated the requirements of the legislation regulating conflict of interests, therefore it suspended the authority of the two men.

Khazaradze filed a lawsuit against the regulator, but the supervisory board decided to withdraw it. It was followed by Khazaradze’s resignation as the board chair.

He announced he was leaving TBC, where he had spent 27 years. His deputy also decided to quit. However, Khazaradze and his deputy will keep positions at TBC Bank Group PLC, registered in London, UK, which keeps 100% shares of TBC Bank.

In his Facebook post, former Chairman of TBC Supervisory Board explained that the Bank has been under attack for the past few weeks, which resulted in huge losses for the shareholders, amounting to $200 million in one month. He also noted that the reputation of the Bank has been put under question.

“I made the decision to leave the bank where I spent 27 years of my life, the bank that I turned from $500 into the largest player in the region. Hopefully, this decision will positively affect the bank’s development in a stable and calm environment,” he stated.

The NBG welcomed the decision of TBC to withdraw the lawsuit and pay the GEL 1 million fine imposed by the regulator.

By Thea Morrison

22 February 2019 15:05