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In September 2015, pursuant to the ordinance of the Government of Georgia, the Bobokvati Governmental Residence, which should have been converted into a recreational facility for military servicemen according to Mikheil Saakashvili’s decree, was transferred to the Georgian Orthodox Church. In exchange, the Government of Georgia received back the movable and immovable property which belonged to Krtsanisi Park Ltd established by the Patriarchate of the Georgian Orthodox Church. Questions were raised regarding the expediency of the property exchange between the Government of Georgia and the Patriarchate of the Georgian Orthodox Church. According to the statement of the Government of Georgia, the state received far more assets for privatisation with this exchange which have a higher investment value. The Minister of Economy and Sustainable Development of Georgia, Dimitri Kumsishvili, commented upon this issue: "I do not want to go further into the part which deals with value but I believe that the Krtsanisi area is far greater than that of Bobokvati."

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According to Decree N1129 of the former President of Georgia, Mikheil Saakashvili, issued on 9 December 2010, the property under the ownership of the Government of Georgia was directly sold to the Patriarchate of the Georgian Orthodox Church for a symbolic price (GEL 1). Specifically, the property included 37 non-agricultural land plots (including Krtsanisi forest park’s five land plots) with a total area of 7,270,657 square metres and 14 buildings with a total area of 24,547.95 square metres. With the same decree, however, the Patriarchate of the Georgian Orthodox Church was banned from transferring the property to the ownership of a third party.

According to Decree N341 of the former Prime Minister of Georgia, Irakli Gharibashvili, issued on 4 March 2014, the ban on the Patriarchate of the Georgian Orthodox Church from transferring the property to the ownership of a third party was revoked.

On 10 April 2014, the Patriarchate of the Georgian Orthodox Church, together with M & C Georgia Holding, established Krtsanisi Park Ltd whose basic aim was to receive profit with the principal fields of activities determined to be construction work, investments, mining, processing and selling of final production. The Patriarchate of the Georgian Orthodox Church put the entire property received from the state by Decree N1129 together with immovable property with an area of 1,000 square metres received by Decree N479 of the President of Georgia, issued on 15 September 2006, in the capital of the newly established Krtsanisi Park Ltd of which 25% of the shares were owned by the Patriarchate of the Georgian Orthodox Church itself. According to the bylaws, M & C Georgia Holding, which owns 75% of the shares of Krtsanisi Park Ltd, had to make a monetary and non-monetary contribution to the capital of Krtsanisi Park Ltd. Additionally, only M & C Georgia Holding was responsible to provide any construction costs arising in the future.

Rati Ghvamberia, Director of M & C Georgia Holding which owns 75% of Krtsanisi Park Ltd, was appointed as Director of Krtsanisi Park Ltd. M & C Georgia Holding was registered on 1 April 2015; that is, nine days before the registration of Krtsanisi Park Ltd.

According to the contract between the state and Krtsanisi Park Ltd concluded on 28 November 2014, the state purchased four plots of non-agricultural land adjacent to the village of Ponichala with a total area of 19,544 square metres for the construction of a highway connecting Tbilisi with Rustavi. For this deal, Krtsanisi Park Ltd received GEL 919,778 in total from the state.

According to Decree N31 of the former Prime Minister of Georgia, Irakli Gharibashvili, the ban on the Patriarchate of the Georgian Orthodox Church from transferring the property received in 2010 by the President’s decree to a third party was reinstated.

On 11 September 2015, the Patriarchate of the Georgian Orthodox Church addressed the National Agency of State Property with an official letter and in exchange for 25% of Krtsanisi Park Ltd, requested the transfer of a non-agricultural land plot with a total area of 149,796 square metres together with 18 buildings on that land plot with a total area of 4,662.21 square metres located at 218 Abashidze Street in Kobuleti. The Patriarchate of the Georgian Orthodox Church also requested a free-of-charge transfer of a land plot with a total area of 11,810 square metres for 49 years together with the transfer of two buildings located on the plot.

Based upon this request, the Ministry of Economy and Sustainable Development drafted a project which was presented to the Government of Georgia on 14 September 2015. According to the project, the state was getting back 100% of Krtsanisi Park Ltd in exchange for the Bobokvati residence. FactCheck requested information on the project from the administration of the Government of Georgia. The administration responded that the project is 59 pages long although FactCheck

was given only two pages. Therefore, the position of M & C Georgia Holding Ltd, as the owner of 75% of Krtsanisi Park Ltd in regard to the aforementioned contract, is unknown. With Decree N2013 of the former Prime Minister of Georgia, Irakli Gharibashvili, issued on 21 September 2015, it became evident that there were no changes in the document and the request of the Patriarchate of the Georgian Orthodox Church was fully satisfied. As a result, the Bobokvati Governmental Residence was transferred to the ownership of the Patriarchate of the Georgian Orthodox Church whilst the state became the owner of 100% of Krtsanisi Park Ltd; that is, the property (now decreased by 18,554 square metres) which was given to the Patriarchate of the Georgian Orthodox Church in 2010.

The contract between the state and the Patriarchate of the Georgian Orthodox Church gave rise to many questions. According to the statement of the Minister of Economy and Sustainable Development, Dimitri Kumsishvili, he has no questions in regard to the expediency of the contract because it was evident that the state was the winner in the deal. Mr Kumsishvili stated that Krtsanisi is far larger in size although there was no audit assessment concerning the value of the two assets at the time of concluding the contract. FactCheck

was informed by the Ministry of Economy and Sustainable Development that the respective audit assessment was prepared only on 30 October 2015.

The Government of Georgia did plan to sell the Bobokvati Governmental Residence together with other assets for privatisation in order to stabilise the GEL exchange rate. The initial price of the Bobokvati residence was announced at GEL 35 million. However, the residence was eventually taken off the list of assets for privatisation. Of note is that as FactCheck

is aware, Bidzina Ivanishvili had personally conducted negotiations with investors in regard to selling Bobokvati before the deal with the Patriarchate of the Georgian Orthodox Church was concluded. The potential investors were studying the offer but the property was exchanged for Krtsanisi Park Ltd without any prior notification to the potential investors.

In regard to the property of Krtsanisi Ltd, apart from five land plots in the Krtsanisi forest park, it includes land plots located adjacent to Ponichala, Aghtaklia, Karajalar and Rustavi with buildings located thereon. According to Audit Assessment N800 made by the Compaud audit company, which was published on 30 October 2015, the total value of the aforementioned assets is GEL 61,548,600. Therefore, based upon a market assessment, the property comprising Krtsanisi Park Ltd is indeed more valuable than that of the Bobokvati Governmental Residence.

At the present moment, Krtsanisi Park Ltd still exists as a legal entity even though the property was completely taken out of its capital, which is now GEL 0, according to Decree N1/1-4547 of the National Agency of State Property. Additionally, it is unknown why the state decided to put Krtsanisi Ltd in the capital of Terdzi Ltd which is 100% owned by the state itself.

Conclusion

Krtsanisi Park Ltd was founded on 1 April 2015. In its capital, in exchange for 25% of Krtsanisi Park Ltd’s shares, the Patriarchate of the Georgian Orthodox Church placed a non-agricultural land plot with an area of 1,000 square metres, received for a symbolic price (GEL 1) from the state in 2006, together with 37 non-agricultural land plots with a total area of 270,657 square metres and 14 buildings with a total size of 24,547.94 square metres received from the state on 9 September 2010. On 28 November 2014, Krtsanisi Park Ltd sold a land plot with an area of 19,544 square metres from the property to the state for GEL 919,778. However, it is unknown where this money was spent.

According to the assessment of the Compaud audit company on 30 October 2015, at the moment of the conclusion of the agreement between the state and the Patriarchate of the Georgian Orthodox Church, the capital of Krtsanisi Park Ltd was GEL 61.5 million. The state gave the Bobokvati Governmental Residence, whose value was GEL 35 million, to the Patriarchate of the Georgian Orthodox Church in exchange for Krtsanisi Park Ltd. It is difficult to say what the final prices of the two assets could have been, however, if they had really been put up for sale.

Therefore, FactCheck concludes that Dimitri Kumsishvili’s statement is MOSTLY TRUE.