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Post-Elections: Cartu Bank Says It’s Free from Political Pressure, Sets Plans for Future Developments

Published: October 8, 2012 | 3:07 pm
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General Director: “Cartu Bank is destined to be the largest bank in Georgia. It is the winners’ bank.”


Cartu Bank, founded by the billionaire Bidzina Ivanishvili, the leader of the Georgian Dream coalition, enters new phase of development since the coalition’s winning the recent parliamentary elections in the country. Having overcome the challenges linked to the founder’s political career, the bank believes it’s time to show up its ambitions and become the largest bank in Georgia. However, first thing on the table is settling the legal issues, which, according to the bank’s General Director, have been imposed on them unfairly by the government. The COMMERCIAL TIMES interviewed Nodar Javakhishvili, General Director of Cartu Bank, Chairman of Supervisory Board, regarding the bank’s current strategy and future development perspectives.

- Not long ago we all remember Cartu Bank constantly spreading news about ‘surprises’ made by the government in regards to Cartu Bank. Reportedly, clients were quitting the bank because of the political pressure put on them. Now, when Georgian Dream has won the 2012 parliamentary elections, what are your expectations? Do you think Cartu Bank will still have to release protesting statements?

- Today I’m not talking about expectations, it’s in the past already. I was saying that as soon as the government changes Georgian society would feel relief shortly. We’re the part of the Georgian society. The very first pleasant surprise I see is that the three persons, who have been sitting next to my room for around a year already, controlling our everyday work, are gone. I mean the so called supervisors sent from the National Bank of Georgia who were taking a bunch of information from us with no legal necessity to do so. We’ve suffered a lot from them; they were taking breath out of us, saying it was necessary to feel the pulse of our activities. Today, Cartu Bank is free from all types of pressure imposed by NGB.

As for the rest issues, General Prosecutor has not come to me to apologize.  However, part of the clients who treated Cartu Bank unconscientiously, are seeking ways to start negotiations with us. This process will be continued. We’re also willing to get the clients back. This is a two-fold situation as there are people who were supporting the government and quit the bank with no external pressure, just to cause us damage and there are also the ones who left on the basis of the agreement with us as the bank was not capable of providing them with relative services any more.

Mr. Ivanishvili has stressed it several times that it’s important to punish the criminals in order to establish justice. People who one day behave indecently, the other day come and apologize and the next day continue doing what they did before, they are not responsible people.

- In May, 2012 Bidzina Ivanishvili alienated his shares in Cartu Bank to his son Uta Ivanishvili. Are you informed whether the leader of Georgian Dream coalition will get the above-mentioned shares back? The coalition has won the majority in the parliament and there’s no longer a threat of harassing his property.

- Mr. Ivaishvili no longer owns shares in Cartu Bank. 8.26% shares of the bank are owned by his son Uta Ivanishvili. It’s up to Mr. Bidzina Ivanihsvili whether he wants to get back his pre-owned shares or not. I cannot speak for him. It’s not an issue of interest for the country. Mr. Ivanishvili is intended to become the Prime Minister of Georgia, which means that problems will raise for him as of a business proprietor then. For me it does not matter who will be the owner of the bank as long as it does not affect my working principles here. Ownership issue does not matter for clients either as complaints should be referred not to the owner but to the bank itself, the law and rules. People were seizing partnership with Cartu Bank when it was owned by Mr. Bidzina Ivanishvili and continued doing so when he alienated his shares and all that was because of  the pressure put on them. If somebody thought Bidzina Ivanishvili was supplied by Cartu Bank money whose problem is it? Mr.Ivanishvili’s, mine or Adeishvili’s (referring to Zurab Adeishvili, the Minister of Justice of Georgia)? When Cartu Bank was attacked first time, somebody thought we were taking sacks full of money to Mr. Ivanishvili. They did soon understand that it was a stupid action, but refused to admit it.

-  In July, 2012, based on the motion of the National Bureau of Enforcement, Tbilisi City Court appointed Vladimer Ugulava as the manager of Cartu Bank. Following the bank’s statement, the interim administration signed the agreements with 4 companies to give away credits amounting to USD 50 million. How was the issue solved?

- This decision made by the interim administration was a criminal action. We reported those contracts void and filed relative lawsuits demanding the decisions made by us to become legitimate and to start criminal investigation on Ugulava-Zarkua (the latter is the advisor of the President of NBG) case. We’re waiting court verdicts on both issues.

- What other violations have happened at the bank during the interim administration?

- Lots of violations took place during that period and we’ve submitted relative applications to legal bodies. For instance, the interim administration started the reconstruction process of our branch in Telavi, which cost 800 thousand when there was no such necessity. Now we’ve stopped the process, but the building is all scratched off.

- You were claiming to sue the National Bank of Georgia, after changing the government, because of putting pressure on Cartu Bank. What are your concrete accusations?

- Everyone, who was involved in criminal activities, will be judged. As for NBG, I would say Georgia has no national bank. Yes, there is a sign that reads the National Bank of Georgia on a building, behind the walls of which work people who get quite high salaries and that’s all. There’s no central bank in Georgia. One of the main tasks should be to restore the activities of NBG within its legal framework and function as a central bank. I’ve said it a lot of times and will repeat again that the national bank was governed by Zurab Adeishvili. The Minister of Justice appoints staff at NBG, it’s true in Kadagidze’s (referring to Giorgi Kadagidze, the President of NBG) case as well. In addition, two new prosecutors have been appointed at the Supervisory Board of NBG. National Bank of Georgia has become a subordinate body of the Prosecutor’s Office. National bank cannot be a central bank unless it’s an independent body, not governed by the executive government.

- You’re saying that Mr.Ivanishvili did not want Cartu Bank to be the leader as a billionaire-owned bank. What will be the strategy of the bank now?

- First, it must be clear what Mr.Ivanishvili’s views are in respect to business structures. If it’s the scheme which I think, it would be right if his family will be the owner of the bank as he has founded it. Management right can be given to a trust company.

I believe Cartu Bank is destined to be the largest bank in Georgia. It is the winners’ bank. Lots of people are willing to open accounts at Cartu Bank. In about 5-6 months we’ll have to come up with some limitation mechanisms as I’m sure all the physical and juridical persons will be asking to partner with us.

- Are you planning to set some limitations?

- Exactly. What I mean is that the bank is itself limited with certain international regulations, which sets certain ceiling indicator above which we cannot act.

I dare say that Cartu Bank is the only bank all over the world against which the entire government has been fighting indecently, including the executive branch, legislative body, court and part of the state-controlled fourth government. You cannot find a single example globally when a bank withstood such unfair conditions. Thus, it’s clear that people want to be the clients of the bank that has survived the worst.

- During an interview with Radio Komersant, you said that after revealing the truth what’s behind some banks, their chiefs could face jail. What are your accusations against them?

- I don’t have accusations, but I do have doubts. Thorough investigation is needed in order to draw relative conclusions.

There are plenty of doubts, including the one linked with Bank of Georgia. I believe, and it’s doubtless, that Bank of Georgia was involved in the robbery attack conducted against Cartu Bank’s employees, however concrete evidence is needed to prove it. I also doubt that balances and financial reports, issued by some representatives of our structure, also certain ones issued by state bodies, are inaccurate.

- What do you mean while saying that practically no banking sector exists in Georgia?

- What I mean is that Georgia has no central bank. Banks have been working here under a governmental umbrella and followed their directives. The market here is monopolized.

- Do you mean that all the other19 banks, except for Cartu Bank, were joined under the governmental umbrella?

- Indeed, there are the banks that were not directly governed by the government, but they did not have the power to stand up to their decisions. It doesn’t mean that the local banking sector has to be built from zero. Banks will be freed from the governmental pressure and will be given an opportunity to work in a competitive environment and will feel relieved. Cartu Bank’s harassment case will never ever have an analogue in Georgia. Banks’ heads will become more collegial and will stand together on crucial issues. For instance, National Bank of Georgia and State Audit Office was monitoring the whole country, controlling all the transactions and banks kept silent. It’s not a banking system where prosecutor decides which information can be taken away from the bank. If a bank has not maintained even the minimum confidentiality it’s not a bank.

- Experts have been discussed the issue of non-performing loans and the necessity of government interference in solving the subject. Georgian Dream promised to settle the problem if elected with majority seats in the parliament. What are your expectations in this respect today?

- Government and banks should both be in charge of solving this issue. Non-performing loan doesn’t mean that client is always right. Every case must be dealt individually. It was back in the times of the President Eduard Shevardnadze that people were told that they would not have to pay electricity loan. It was a wrong approach. When I was paying for the electricity and someone did not, this decision incited me to stop paying the bill too. Today we see Saakashvili’s initiative of GEL 1000 voucher to every family. Why should the rich as well as the families below a poverty line get same equal GEL 1000 aid? This is unfair.

- In Georgia interest rate is much higher than in the EU countries. Several months ago Mikheil Saakashvili, the President of Georgia, called the banks to decrease them. Would you agree with the President on this concrete issue?

- Bank is a credit institution that attracts free financial resources and places them profitably. Let the President keep away from discussing the interest rate indicator. Instead, he must create competitive market relations in the country and this will itself regulate interest rate percentage. When President says that price on medicines is high and the other day it drops right away it means that particular pharmaceutical network is of his own. Competitive market is the only solution to the price policy regulation.

It’s not a problem for Saakashvili and Kadagidze to accuse me of being the part of the dark past as I’m older than they are. I am sorry but neither of them has an idea what the market economy is truly about. If we have high interest rates on loans it’s only because the structures are monopolized. It would not be a case in an open market economy and consumer would profit most in such environment.

- Cartu Bank is mainly oriented at corporate clients. Do you plan to expand on retail market?

- Since we’ve been deprived of certain group of corporate clients, the bank activated retail market direction. Today, Cartu Bank offers lots of products to its individual clients: mortgage loans, consumer loans, auto loans, etc.

- What are the future plans of Cartu Bank? Do you plan to launch new products and services on the local market?

- We don’t have any concrete plans at this phase. First, the issues around the Cartu Bank have to be settled. It will take some time. Elections are over, but the new parliament has not gathered yet. Without the support from the legislative body our team has no tool to act but the moral success. I can also say that NBG no longer disturbs us. I hope courts will also start drawing more fair conclusions regarding our appeals.





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