According to Decree N136 of 21 March 2011, Georgia State Agricultural University, a legal entity of public law, was reorganized into a non-profit entity; namely, the Agricultural University of Georgia. The Ministry of Education and Science of Georgia and Agricultural Education and Science Foundation became the founders of this university. Later on 30 March 2011, according to the N1 protocol of the Agricultural University’s constituent assembly, the Agricultural Education and Science Foundation was defined as one of the founders of the Agricultural University.
According to the date by the Civil Registry, the Agricultural Education and Science Foundation was established on 31 January 2011 and given the status of a non-profit legal entity. The purpose of the creation of this Foundation was to promote and develop agricultural education and science in Georgia. The founder of this Foundation is the Knowledge Fund, a non-profit legal entity.
The Knowledge Fund was registered on 4 June 2007 with the promotion and development of education and science constituting the basis of its activity. The Fund was founded by Kakha Bendukidze.
The purchase agreement was signed between the Ministry of Economy and Sustainable Development of Georgia and the Agricultural University of Georgia on 24 February 2012. According to the agreement, a 100% share of the state-owned Agromet Ltd was given to the Agricultural University through direct purchase for USD 4,000,000. Besides that, the Agricultural University was supposed to transfer USD 1,000,000 to the educational institutions identified by the Ministry of Education and Science of Georgia. Later on, according to a Decree of the President of Georgia of 12 October 2012, amendments were made to the purchase agreement. According to the amendments, the privatization bill for Agromet Ltd was determined as USD 150,000. In addition, the following obligations were imposed upon the buyer:
a) The Agricultural University had to pay the privatization bill for a period of 24 months after the signing of the agreement. It should be noted here that the abovementioned costs, USD 5,150,000 in total were paid by the Agricultural University.
b) The Agricultural University as a buyer was obliged to use the training infrastructure located at the 12thkm of David Aghmashenebeli Avenue in Tbilisi only for educational-scientific purposes for a period of 96 months after the signing of the purchase contract.
c) Investing GEL 6,000,000 in the agricultural land including the buildings built upon it located at the 12thkm of David Aghmashenebeli Avenue in Tbilisi owned by Agromet Ltd which was then increased by GEL 8,000,000 as a result of the amendments made to the purchase agreement. However, instead of the increase in the investment obligations, they were lifted.
d) Investing GEL 400,000 in the 305,389 m² of agricultural land including the buildings built upon it located in the village of Vazisubani, Gurjaani Municipality, owned by Agromet Ltd.
e) Investing GEL 800,000 in the 69,403 m² of agricultural land including the buildings built upon it located in the village of Tabakhmela in Tbilisi, owned by Agromet Ltd.
It is noteworthy that according to the amendments made in the purchase agreement, the term for the investment commitments was increased from 18 months to 22 months for the Agricultural University.
Kakha Bendukidze was called as a witness by the Prosecutor’s Office of Georgia on 18 March. The case concerned the reorganization of the Agricultural University as a legal entity; specifically, the transfer of the real estate of 14 research-education institutions located on different territories in Georgia to the capital of Agromet Ltd at a pre-reduced price. Later the case concerned the privatization of Agromet Ltd.
In his statement, former Prime Minister Bidzina Ivanishvili mentioned that Agromet Ltd was worth GEL 200 million. According to the Prosecutor’s Office, Agromet Ltd’s carrying value was GEL 65 million while the base value was more than GEL several hundred million. However, the owner and rector of the Agricultural University categorically deny this fact. FactCheckrequested official information about the market value of Agromet Ltd from the LEPL National Agency of State Property. Upon receiving a response, we will provide readers’ with detailed information.
According to the Law of Georgia on State Property, direct selling is one of the forms of the privatization of state-owned property. The purpose of the privatization of state-owned property is to transfer the property right to a buyer who fully and faithfully performs the prescribed conditions for the privatization of state-owned property through direct purchase. In this case, the Law does not prohibit the privatization of state-owned property for less than a market value. We checked whether or not the Agricultural University complied with the privatization terms.
According to the purchase agreement, the Agricultural University should have presented the audit report certifying the fulfilment of obligations to the Ministry of Economy and Sustainable Development of Georgia no later than 30 calendar days after the end of the investment term obligations.
According to the audit report by Grant Thornton Ltd, the Agricultural University of Georgia fulfilled its investment obligations and as of 24 December 2013 it invested GEL 11,224,674 (without VAT).
According to the audit report by EY Georgia Ltd, the Agricultural University of Georgia fulfilled its investment obligations from 24 February 2012 until 24 December 2014. Expenses in order to meet the investment obligations amounted to GEL 11,327,593 in total (without VAT).
According to the report prepared by Financial Management Group Ltd, the Agricultural University of Georgia complied with the terms and obligations of the agreement. The investment amounted to GEL 11,201,893 in total by 24 December 2013.
We also visited the site of the Agricultural University and we can confirm that the university is equipped with modern technology, wireless internet, a diverse library, conference halls, research labs, sport facilities and hall, etc. In addition, according to the average scores of student entrants enrolled in 2012 and 2013, the Agricultural University ranks sixth place. The Agricultural University complied with the imposed obligations and used the training infrastructure located at the 12thkm of David Aghmashenebeli Avenue in Tbilisi only for educational-scientific purposes.
Conclusion We found out that Agromet Ltd owned 599,438 m² of agricultural land located at the 12th
km of David Aghmashenebeli Avenue in Tbilisi including buildings and infrastructure facilities built upon it as well as 305,389 m² of agricultural land including the buildings built upon it located in the village of Vazisubani, Gurjaani Municipality. Agromet Ltd also owned 69,403 m² of agricultural land including the buildings built upon it located in the village of Tabakhmela in Tbilisi.
The Agricultural University of Georgia purchased Agromet Ltd directly from the state on 24 February 2012. This property was purchased by the Agricultural University for USD 4,150,000. In addition, according to the purchase agreement the buyer transferred USD 1,000,000 to the educational institutions identified by the Ministry of Education and Science of Georgia. Thus, the privatization cost was equal to USD 5,150,000.
The investment obligation with a value of GEL 8,000,000 was imposed upon the Agricultural University. According to the audit reports prepared by Grant Thornton Ltd, EY Georgia Ltd and Financial Management Group Ltd, the Agricultural University of Georgia complied with the imposed obligations within the terms defined by the contract. The amount of investments verified by the auditors by 24 December 2013 was equal to more than GEL 11,000,000.
In addition, the Agricultural University as a buyer was obliged to use the training infrastructure located at the 12thkm of David Aghmashenebeli Avenue in Tbilisi only for educational-scientific purposes for a period of 96 months after the signing of the purchase contract. The Agricultural University complied with this obligation as well and nowadays is one of the most sought after universities in Georgia by students.
In his statement former Prime Minister Bidzina Ivanishvili emphasized that Agromet Ltd was worth GEL 200 million. According to the Prosecutor’s Office, Agromet’s carrying value was GEL 65 million while the base value was more than GEL several hundred million. This is not verified by the owner and rector of the Agricultural University. FactCheck currently does not have any official document confirming the market value of Agromet Ltd. Therefore, FactCheckcannot exclude the possibility that the market value of the Agromet Ltd might be more than what the Agricultural University paid to purchase it. However, one thing is clear. The Agricultural University paid much more than GEL 1 to purchase this property. It purchased Agromet Ltd for USD 5,150,000 with an investment obligation valued at GEL 8,000,000.
FactCheck concludes that Bidzina Ivanishvili’s statement, “200 million worth of property (Agricultural University) has been donated to Bendukidze for one lari,” is FALSE.
