Bloomberg News

Georgia Seizes Ivanishvili Bank Millions in Laundering Sting

October 19, 2011

(Updates with Cartu Bank statement in third paragraph, central bank in sixth.)

Oct. 19 (Bloomberg) -- Georgian police seized “several million dollars and euros” from billionaire Bidzina Ivanishvili’s Cartu Bank and detained at least six people on suspicion of money laundering.

Shota Utiashvili, an Interior Ministry spokesman, said by telephone that the money belonged to Tbilisi-based Cartu and had been seized from an armored delivery van. He declined to name the detained people, who were released after questioning.

“This had nothing to do with money laundering,” Cartu President Nodar Javakhishvili told reporters. “We needed cash to comply with banking regulations. This was a case of going to another bank to get cash.” Interpressnews reported that $2 million and 1 million euros were confiscated.

Eka Beselia, a lawyer for Ivanishvili, said the seizure was “illegal” and called on authorities to return the money. Members of Ivanishvili’s security detail were also forced to surrender their weapons, she said in an interview.

Cartu Bank belongs to Ivanishvili, said Elza Nabakhteveli, a spokeswoman for the billionaire.

Georgia’s central bank said in an e-mailed statement that it may investigate the seizure and will assess the situation at Cartu after a number of recent management changes.

Smear Campaign

Ivanishvili, a Rossiiskiy Kredit Bank board member, was stripped of Georgian citizenship on Oct. 11, four days after he announced plans to create an opposition party to challenge President Mikheil Saakashvili. In May, Ivanishvili accused the president of orchestrating a smear campaign against him by spreading rumors that he was bankrolling the government.

Forbes magazine in March estimated Ivanishvili’s wealth at $5.5 billion, equal to almost half of Georgia’s $11.7 billion economy. Nabakhteveli said in May that the Forbes estimate was accurate and that he held about one-third of his assets in Russia and the remainder in market investments abroad. Ivanishvili lives primarily in his native village, Chorvila.

--Editors: Patrick G. Henry, Jennifer Freedman

To contact the reporter on this story: Helena Bedwell in Tbilisi at hbedwell@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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