Minefield for the Investor

 

In more than twenty years of practicing law in Ukraine and abroad, I have probably written more than thirty articles. All of these articles dealt with either legal topics and issues or business issues with a legal perspective.

In writing my articles, as well as in preparing legal advice to clients, I have always believed that it is necessary to present facts correctly (without twisting them), analyze them properly, and draw conclusions based on this. If either the facts or the analysis is flawed, so will be the conclusions. And it is on the basis of the presentation of facts, analysis and conclusions that my clients and readers of my articles make their decisions regarding business matters.

However, the subject of this article is not the theoretical aspects of legal ethics, but the hard facts of life which I would never usually write about or touch upon. However, I am forced to do so for several reasons.

Firstly, recently a foreign client of our firm was groundlessly accused in one of the publications of Ukrainian mass media of allegedly being involved in the repair of Russian military attack aircraft. We have taken this accusation very seriously, because as a responsible Ukrainian law office, which is part of an international law firm, the last thing we want is to help a client who helps an aggressor-state.

Therefore, we conducted a full investigation of the allegations, and the results of our investigation not only completely and unconditionally refute the allegations against our client (and against us), but also bring to light the methods used by the author of the article in writing it and in substantiating his allegations. These methods have nothing to do with civilized and professional journalism and the principles and values of freedom of speech.

Secondly, the very fact and timing of the accusations raises questions as to who is really interested in them and who is their beneficiary. Unfortunately, since the “actors” involved in the relationship with our client are the Kyiv city authorities, there are reasonable suspicions that the accusations may be based on a banal corrupt interest.

Thirdly, the allegations themselves, and publication in which they were made, raise serious questions about the way in which some Ukrainian mass media operate, which I once believed to be reputable and disseminate objective and verified information. Unfortunately, as will be shown later in this article, this view was wrong, which is a great disappointment for me personally.

We have passed on the results of our investigation, which refute the allegations made against our client, to the competent state, law enforcement and intelligence agencies so that they can independently verify them. In our opinion, this issue is not just a matter of fact-checking, but a matter of Ukraine’s national security in terms of the treatment foreign investors receive in Ukraine. It is no secret that foreign investors and foreign investment will play a key role in rebuilding the country.

So, let’s get to the point.

The Essence of the Accusations

 In the final days of last year, The Weekely Mirror (Dzerkalo Tyzhnia – in Ukr. Дзеркало Тижня) published an article by journalist Serhii Ivanov in which he directly accused British-Georgian businessman and investor Tamaz Somkhishvili of being involved in the repair of Russian military attack aircraft. Tamaz Somkhishvili was once an investor in a project launched by the Kyiv city authorities. However, after the city authorities themselves canceled the project, it turned into a court dispute that has been going on in Ukrainian courts for more than five years.

Interestingly, the accusations against Tamaz Somkhishvili were activated precisely after, in July 2022, his Ukrainian company, a claimant in the court case, offered the Kyiv authorities (the respondents in the case) to enter into a settlement agreement. Under one of the terms of the proposed settlement agreement, the investor would waive its monetary claims, including those already awarded by the court of first instance. When making the offer to sign a settlement agreement, the company and its representatives in court proceeded from the fact that the country is at war and its infrastructure is under constant attack, and that at this difficult time, there are other challenges and more important matters that require attention from the authorities, and from responsible business as well.

One might ask what could be better for the city authorities and community than for the investor to give up his monetary claims? But no, as soon as this solution was proposed, on the contrary, media attacks on the investor not only increased but also reached a new level.

Who is Tamaz Somkhishvili?

Born in Georgia, Tamaz Somkhishvili was living in Siberia since 1978, where he experienced the collapse of the Soviet Union. In a region of Russia where probably every third employee in the oil and gas industry was a Ukrainian, he also started his business in oil production and export, often working directly in the oil deposits himself.

Subsequently, his oil company became part of the LUKOIL group, which was and still is Russia’s largest privately owned oil company. Moreover, at the time, when Mr. Somkhishvili worked there, a significant minority shareholder of the company was Conoco Philips, one of the largest American oil companies.

By 2007, Mr. Somkhishvili had completely exited the oil business and, with the money he had earned in it, began to invest in other countries, which included his native Georgia as well as Ukraine, among others. In particular, he invested about $30 million in Ukraine alone. Of this money, the city of Kyiv received more than $14 million.

It is worth noting that Mr. Somkhishvili’s business model of investment activity envisaged that he invested his own funds in long-term projects rather than receiving funds from the state, developing businesses with a plan to receive investment profit in the future when the businesses would reach their maximum value. In fact, for more than fifteen years of doing business in Ukraine, Mr. Somkhishvili and his businesses have not received, “mastered” or squandered a single hryvnia of public funds. Isn’t this the kind of investor that Ukraine needed and still needs?

Since the mid-nineties, Mr. Somkhishvili has been a resident of Great Britain. In 2007, after all of his family members became British citizens, he also received a British passport. Since then, he has not resided permanently in Russia, living mainly in the UK, Georgia, Austria, Ukraine and Monaco.

In Europe, Mr. Somkhishvili became an active participant and patron of the Georgian diaspora, particularly the Georgian diaspora in the United Kingdom. As a parishioner of the Georgian Orthodox Church, he founded a parish of the church in London and purchased a church building for the Georgian Orthodox Church (not the Russian Orthodox Church), which became one of the few Georgian churches in Western Europe. In Georgia, Mr. Somkhishvili is one of the biggest patrons and sponsors of the St. Andrews the First-Called Georgian University of the Patriarchate of Georgia. In fact, Mr. Somkhishvili acted like many philanthropists from the Ukrainian diaspora abroad who have founded Ukrainian churches and educational institutions.

Meanwhile, in Ukraine, in 2020, while a dispute between Mr. Somkhishvili and the Kyiv city authorities was already underway, he received a residence permit in the country. None of the state authorities or law enforcement agencies that carry out their checks in the process of issuing residence permits in Ukraine had any claims against Mr. Somkhishvili.

What is Mr. Somkhishvili Accused of?

In his article in the online version of the Weekly Mirror newspaper, which Serhii Ivanov titled “Russian “SU” with Georgian Flavour“, he accused Mr. Somkhishvili of being involved in the repair of Russian military aircraft, either in Georgia or in Russia, and of allegedly being related to the Russian LLC NPK “Sturmoviki Sukhoho”.

To be impartial and specific, we have thoroughly researched and responded to each and every accusation made by Serhii Ivanov in this article. It should be emphasized that the Georgian state registries we used allowed us to obtain information in English. Where information was available only in Georgian, we used the help of Georgian lawyers.

For the convenience of the reader, in this article we have copied the texts of Ivanov’s accusations from his article and provided a response to each of them. When we sent the same responses to the Ukrainian government and law enforcement agencies, we also attached all of the documents on which our responses and refutations of the allegations are based.

1. Serhii Ivanov states: “In 2015, Somkhishvili established Airplane Technics, which was supposed to service civil aviation – large Boeings, Airbuses and Embraers. But the business did not go well, and in 2017 the company ceased to exist. But it was a venture investment. Relations with the Western world did not work out, but relations with the “Russian world” were excellent.”

The results of our research and refutation of the allegations:

Indeed, Mr. Somkhishvili founded Airplane Technics, which built service facilities at Tbilisi airport. These facilities were indeed aimed at servicing civil aviation aircraft.

However, the company did not cease to exist in 2017, as Ivanov writes. Moreover, the company’s activities were particularly active in 2017. The company’s activities suffered damage as a result of the global COVID-19 pandemic, just as aviation companies around the world, including Ukraine, suffered this damage. But this happened only since 2020. Since then, Airplane Technics has been forced to significantly reduce its activities. However, the company still exists today, as well as the civil aircraft maintenance facilities it has built.

At the end of his statement, Ivanov claims that “relations with the “Russian world” are excellent“. This is a completely unfounded assertion. As we will set out in more detail below, neither Airplane Technics, nor any of the other aviation-related companies to which Mr. Tamaz Somkhishvili is affiliated, have any relations with the “Russian world” as Ivanov defines it.

2. Serhii Ivanov states: “The TS Holding website lists TAM Management as a partner. TAM Management is a private company that controls the Tbilisi Aviation Plant – Joint Stock Company Tbilaviamsheni, which has been manufacturing and repairing military aircraft since the Soviet times.”

The results of our research and refutation of the allegations:

TS Holding LLC is indeed a Georgian holding company owned by Mr. Tamaz Somkhishvili, and he is also the President of this company. This is open information reflected in state registers of Georgia which are publicly accessible.

Georgian Limited Liability Company TAM Management LLC is indeed a private Georgian company in which Mr. Somkhishvili is one of the indirect investors. This explains the nature of the partnership with TS Holding, which is openly stated on the TS Holding website.

However, TAM Management does not in any way control the Joint Stock Company Tbilisi Aviation Plant – Joint Stock Company Tbilaviamsheni (Tbilisi Aviation Plant JSC), which is a different and unrelated legal entity. Moreover, Tbilisi Aviation Plant JSC is owned by the State of Georgia and is managed and controlled by the Ministry of Defense of Georgia. This is also public information that can be easily verified in numerous state and non-state sources.

The only relationship between TAM Management and Tbilisi Aviation Plant JSC is the usufruct agreement (one of the types of property use agreements), on the basis of which TAM Management received for use (a kind of lease) an aircraft hangar for a period of 15 years, which TAM Management uses in its operations. There are no other relations, including control relations between TAM Management or Mr. Tamaz Somkhishvili on the one hand, and Tbilisi Aviation Plant JSC owned by the government of Georgia on the other.

Regarding TAM Management, it is important to emphasize that information about its activities is well known, particularly to other players in the aviation industry, including those based in Ukraine. One of the counterparties of TAM Management, as the company openly states on its website, is Ukroboronprom – the main Ukrainian state-owned defense group (however, Ivanov, in his article, decided to keep silent about this fact), with which TAM Management had a relationship. We do not know the details of this relationship, given the industry of Ukroboronprom, they may well be confidential. In any case, the competent state authorities can verify this.

3. Serhii Ivanov states: “But the plant is not just a partner of TS Holding, but a particularly trusted partner, because its board includes a man named Giorgi Tamazovich Somkhishvili. It seems that this is the son of the “British investor”, who also, by a strange coincidence, lives in Moscow.”

The results of our research and refutation of the allegations:

We understand that by “plant” Ivanov means Tbilisi Aviation Plant JSC. Mr. Tamaz Somkhivili does have a son named Giorgi Somkhishvili, who was born in Russia but has been living in London since the 90s and is a British citizen.

We checked the data of the State Register of Georgia regarding the Tbilisi Aviation Plant JSC, and indeed there is a person named Giorgi Somkhishvili among the members of its governing body. This register also contains a unique individual number of this person, which every citizen of Georgia has. However, Giorgi Somkhishvili, who is a member of the governing body of Tbilisi Aviation Plant JSC, is not the same Giorgi Somkhishvili, who is the son of Mr. Tamaz Somkhishvili. This can be easily verified from the public registers of Georgia.

The person who is a member of the governing body of Tbilisi Aviation Plant JSC was born in 1978, while the son of Mr. Somkhishvili was born in 1992. A member of that governing body is a Georgian citizen, while Mr. Somkhishvili’s son is not a Georgian citizen but a British citizen.

In the electronic public register of voters of Georgia, we entered the individual number of a person named Giorgi Somkhishvili, which is indicated for this person in the extract from the register of companies for Tbilisi Aviation Plant JSC. The result confirmed that the member of the governing body of Tbilisi Aviation Plant JSC, and son of Mr. Tamaz Somkhishvili, are different persons.

However, here we must also emphasize a clearly bad faith technique on the part of Serhii Ivanov, which can only be compared to deception. In his statement, Ivanov confidently asserts that “a person named Giorgi Tamazovich Somkhishvili is a member of the … board“, emphasizing the patronymic.

In Georgia, unlike in Ukraine, patronymics are not used. This is a fact, and it is evident from the information in the state registers of Georgia. Ivanov could not help but see this fact. But, nevertheless, he decided to deliberately make an “addition” regarding the patronymic, which is undoubtedly a dishonest action on his part, aimed at stretching, to put it mildly, the truth to match his groundless accusations.

If someone suspected that one Giorgi Somkhishvili was urgently replaced by another of his namesakes (as was sometimes unfairly practiced in Ukraine at various levels of elections), the data on members of governing bodies, and the chronology of appointments to the governing bodies of Georgian enterprises, particularly joint stock companies which belong to the state, including Tbilisi Aviation Plant JSC, can be checked in the state registers of Georgia.

For the avoidance of doubt, Mr. Somkhishvili’s son, Giorgi Somkhishvili, is not a member of the governing body of TAM Management, nor does he “live in Moscow“, as Ivanov claims, but is domiciled in London, UK.

4.Serhii Ivanov states: “…the specialization of the plant is the repair of combat aircraft, and secondly, a significant part of the aircraft repaired by the plant is Russian.”

The results of our research and refutation of the allegations:

To be precise, again, we understand that by the term “plant” Ivanov means Tbilisi Aviation Plant JSC. To the best of our knowledge, Tbilisi Aviation Plant JSC does not repair aircraft owned by Russia. We have to make this caveat (qualification) “to the best of our knowledge” in good faith because neither we nor Mr. Somkhishvili or his companies are affiliated with or control Tbilisi Aviation Plant JSC.

However, as a result of our research, we have found a well-known fact that during the military aggression of the Russian Federation against Georgia in 2008, Russian military aircraft bombed the territory of the plant. It seems that Ivanov’s terminological manipulations are intended to falsely claim that the plant is involved in the repair of equipment belonging to Russia, rather than Soviet or Russian-made equipment belonging to other states. As far as we understand, the subject of the plant’s activities is the latter. We have no doubt that Ukraine’s intelligence agencies can independently and impartially verify this information.

5.Serhii Ivanov states: “Also, the plant has a representative office in Moscow, and not just has – but is a co-founder of LLC “NPK “Shturmoviki Sukhoho“, which is engaged in the repair of fighters and attack aircraft SU for the Russian army.”

The results of our research and refutation of the allegations:

To verify this statement, in addition to the data from the Georgian registries, we used publicly available information, including on Russian Internet resources, to the extent that we could access them (since access to Russian Internet sites is significantly and not unreasonably restricted in Ukraine).

A technical detail is that, according to Ivanov’s own data, which he mentions in the article, it is not Tbilisi Aviation Plant JSC (we assume that Ivanov continues to mean this enterprise by the term “plant”), but another legal entity – Limited Liability Company “TBILAVIAMSHENI” (TBILAVIAMSHENI LLC) – that has a representative office in Russia. We have not verified this information separately, but we have checked with the Georgian State Register of Companies that such a company, TBILAVIAMSHENI LLC, does indeed exist.

According to the Georgian registry, TBILAVIAMSHENI LLC is an enterprise that is also owned by the state of Georgia. The fact that Tbilisi Aviation Plant JSC and TBILAVIAMSHENI LLC are different entities is a fait accompli, but Ivanov prefers to keep this fact quiet. The purpose of this is probably to create the impression that these two separate legal entities are one and the same, and that Mr. Somkhishvili’s son is involved (which we have already refuted above).

On the Russian public Internet resource rbc.ru, which publishes information on Russian companies, we found evidence that indeed, among the more than forty shareholders of LLC NPK Shturmoviki Sukhoho, the company TBILAVIAMSHENI LLC is listed. However, what surprised us was that, in addition to the Georgian shareholder, among those more than forty shareholders of LLC NPK Shturmoviki Sukhoho, there are three state-owned Ukrainian enterprises which operate in Ukraine’s military defense complex, namely: (1) PUBLIC JOINT STOCK COMPANY “SCIENTIFIC AND TECHNICAL COMPLEX “ELECTRONPRYLAD”; (2) STATE ENTERPRISE “KHARKIV MACHINE-BUILDING PLANT “FED”; and (3) STATE ENTERPRISE OF SPECIAL INSTRUMENT MAKING “ARSENAL”.

Serhii Ivanov could not but see this information as well. But it seems that he probably decided to keep it quiet, because otherwise, it would be difficult for him to accuse a Georgian private investor of controlling a Russian military enterprise the other three shareholders of which are Ukrainian state-owned enterprises.

Unlike Ivanov, we are far from accusing the three Ukrainian state-owned enterprises mentioned above, or the state authorities to which these three state-owned enterprises belong, of being involved in the repair of Russian military aircraft. Furthermore, we have serious doubts about the involvement of the Georgian company TBILAVIAMSHENI LLC as well.

As far as we could see from public information, LLC NPK Shturmoviki Sukhoho was incorporated in 1992, immediately after the collapse of the USSR. It is likely that the Ukrainian and Georgian companies (in addition to Kazakh, Belarusian and other companies, which we also saw on rbc.ru) became shareholders of LLC NPK Shturmoviki Sukhoho at that time, in order to preserve production relations between the companies in the industry in already independent countries.

However, we have to admit that we cannot say for certain what is the role of the three Ukrainian state-owned enterprises in the activities of LLC NPK Shturmoviki Sukhoho, nor what is the role of TBILAVIAMSHENI LLC in this. Ukrainian intelligence agencies can verify this if they wish. The only thing we can state for certain and with evidence is that neither Mr. Tamaz Somkhishvili nor his family have anything to do with the activities of either LLC NPK Shturmoviki Sukhoho or TBILAVIAMSHENI LLC.

6. Serhii Ivanov states: “So, the same person who has, so to speak, an “indirect relation” to the restoration of damaged Russian “SUshki” and “MiGs”, which kill Ukrainians and destroy our cities, is trying to sue Kyiv for $100 million. An unfortunate coincidence? No.”

The results of our research and refutation of the allegations:

As journalist Serhii Ivanov touched upon the subject of the dispute between Mr. Somkhishvili and the Kyiv city authorities in his article, we will also elaborate on this issue further below. At this point, we can only repeat what we stated above – the investor offered the Kyiv city authorities to enter into a settlement agreement under which he would waive his monetary claims.

The information we have provided above, refuting and responding to Ivanov’s previous baseless allegations, in particular regarding the control of those companies through the alleged involvement of Mr. Tamaz Somkhishvili’s son, completely refutes any “indirect involvement” or “direct involvement” of Mr. Somkhishvili in the recovery of damaged Russian military aircraft.

It is obvious that Ivanov, in his statements, deliberately falsifies information in order to groundlessly accuse Mr. Somkhishvili and cause a public outcry. Below, we will also address the question of who could actually benefit from such activities of Ivanov.

What Does the Investor Demand or not Demand, and Why, and Was There any Investment at all?

In their publications, Serhii Ivanov, and similar authors, “confidently” claim that there was no investment from Mr. Somkhishvili at all, and that there are no accounting or any other documents that would confirm the fact of the investment, and that the investor allegedly did nothing at all. Moreover, in the Supreme Court, when the judge formally asked the city representative whether he could confirm the receipt of funds from the investor, the city representative (on the record) stated that “it is not the functional power of the local authority to confirm the receipt of funds.” Given the availability of all payment documents in the court case file, this is certainly an “innovative” practice of the authorities.

So, what kind of investment project was it, what did the investor and other parties to the project do regarding it, and was there any investment at all?

In 2007, the Kyiv City Council announced an investment project for the large-scale reconstruction of Kharkivska Square on the left bank of Kyiv. The project participants from the state side were: Department of Economics and Investments of the Kyiv City State Administration, Kyivavtodor (i.e. state-owned road maintenance and construction company) and Kyiv Metropolitan (the company operating Kyiv’s metro transport). After winning the investment tender and immediately paying the equivalent of approx. USD 13.5 million to the city, the private participant in the project was the company Kyiv Terminal LLC, a Ukrainian company owned by Mr. Tamaz Somkhishvili.

Currently, these kinds of investment projects in Ukraine are called “public-private partnership”. Back in 2007 this definition was not in use yet. Importantly, at the recent Economic Forum in Davos, public-private partnership was determined as the most obvious instrument with the help of which the Ukrainian infrastructure, ruined by the war, will be rebuilt and modernized.

When Mr. Somkhishvili was making his decision to enter into the investment project with the city of Kyiv, it was a carefully calculated decision, as his partner and co-investor in this project was supposed to be Apollo Real Estate, which is part of Apollo Global Management. The latter is one of the largest international institutional investment funds that the President of Ukraine is actively trying to engage to rebuild Ukraine.

There was a Memorandum of Understanding signed with Apollo, under which the fund agreed to enter into, and invest into the project once the city transferred into lease the project land plots to Kyiv Terminal LLC. The latter was the commitment and obligation of the city authorities under the investment project.

Each of the project parties had its own obligations in the project. However, the only party that  was actually fulfilling them was Kyiv Terminal LLC. Even the simplest obligation of the city authorities to transfer the land into lease, so that the investor could start developing the project, was not fulfilled by the city authorities. It cannot be ruled out that the city officials at the time expected something more from the investor than just fulfilling his obligations. Nevertheless, the investor did not take any illegal action, but went to the Ukrainian court with a lawsuit to make the city authorities lease the land plot to him.

It is interesting that people like Ivanov publicly refer to the fact that the city violated its fundamental obligation to provide land as something heroic. In other words, they are essentially justifying and defending a banal breach of obligation on the part of the authorities. At the same time, they keep silent about the fact that the investor spent, and in fact lost, a year and a half in courts with the city authorities instead of developing the project.

Furthermore, by losing valuable time, the investor had entered into the peak of the real estate global crisis in 2008, and in this way lost the opportunity to continue cooperating with Apollo in this project.

After obtaining the lease on the land plot through litigation, the city authorities decided to block the project in a new way, namely, by not approving the project design, without which the investor could not fulfill its obligations. At the same time, the investor was paying the land rent regularly and engaged English architects who worked directly in Kyiv and prepared preliminary design documentation. On the other hand, the city authorities never took the slightest step to fulfill their obligations.

This lasted until 2013, when the Kyiv City Council decided to seize the land plots, which effectively meant that the city stopped the investment project. During the entire time the project was underway, none of the parties to the project, from the municipal side, had or made any claims against the investor, and there were no accusations that the investor had failed to fulfill any of his obligations.

After the land plot was seized, as required by the Kyiv City Council decision, all four parties to the investment project entered into a termination agreement, under which the city authorities recognized that the investor had incurred costs and losses that should be compensated. Among other things, the obligation to reimburse the investor’s losses is based, not only on the provisions of that agreement, but also on the provisions of Ukrainian law that provides for the obligation of the authorities to reimburse.

The city authorities imposed on the investor the obligation to engage an independent certified appraiser to assess the investor’s damage, which the investor did. For this purpose, a licensed auditing company was engaged, the same one whose services were also used by the Government of Ukraine at the time when it engaged them to assess the value of the Ukrainian gas transportation system.

The amount of the investor’s losses was determined, not by the investor, but by a licensed appraiser. Subsequently, in a court case, the investor’s losses and appraiser’s conclusion were confirmed by a state expert institute appointed by the court. In the course of the litigation, the court decided to approve only approximately 25 percent of the investor’s losses, arguing that, although Ukrainian law does provide for compensation for indirect losses, it does not provide for a procedure for calculating them, considering that the calculation was done by the licensed appraiser. A strange conclusion, but “we have what we have“.

Subsequently, the court case was heard in the appellate instance, which took the position of the city authorities, and in the Supreme Court, which disagreed with this position of the appellate court and returned the case back to the appellate instance, where it has been for more than a year.

After the courts in Kyiv resumed their work and the court decided to resume the hearing of this case, Kyiv Terminal LLC immediately offered the city authorities to enter into a settlement agreement under which the company would waive its monetary claims, including those approved in the first instance, the city would recognize its violations in the course of the investment project (in fact, this is a rather symbolic obligation), and after the end of martial law, the city and the investor will jointly agree on a land plot to be transferred to the investor, on which the investor will build an infrastructure facility at its own expense.

And it was after this offer from the investor that Ivanov’s accusations, fictitious Wikipedia pages accusing Mr. Somkhishvili of being involved in organized crime and being a “criminal boss”, statements that the sole purpose of the investment project was to seize funds, and much more dirt, appeared on the “stage”.

So, who benefits from bringing the situation to this level of heat? In fact, this issue should be the subject of an investigation by Ukrainian law enforcement agencies. Who benefits from not accepting the investor’s refusal to compensation of the investor’s losses? Who benefits from the dispute continuing, and possibly growing into an international investment arbitration dispute between the investor and the Government of Ukraine?

Another issue arises – this whole situation puts Ukraine in an extremely negative light. This is especially important for future public-private partnership projects. What foreign investor would want to deal with our authorities if, in the case of violations on their part, it would be easier and cheaper for these authorities (or rather for the private interests of individuals who hide behind them) to hire such “journalists” to slander investors rather than fulfill their obligations.

Regarding the latter, it is regrettable that the Kyiv City Prosecutor’s Office, when entering into the case, did so with a statement that the fact that the city authorities failed to fulfill their obligations is the investor’s risk. In fact, this statement means that government agencies can fail to fulfill or violate their obligations because they will never be held liable for it. With this position of the prosecutor’s office, will we attract foreign investors to Ukraine?

The Role of the Media in this Situation

It is no exaggeration to say that the role the media in Ukraine agreed to play in this situation was a great disappointment to the author of this article, especially the media that were considered to have a reputation that could be relied upon. The Weekly Mirror was one such media.

When, back in November 2022, Weekly Mirror first published an article that negatively covered the situation around the investment dispute, which Weekly Mirror simply reprinted from another media, we contacted the Weekly Mirror editorial board and provided them with a full list of facts that refuted the negative coverage. We did not threaten to file lawsuits, as is stereotypically the case in Ukraine, and did not demand anything. Having provided the journalists with the “dry” facts, we invited them to check them and check us.

But the response of Weekly Mirror to our appeal was not to check the facts or to engage in any reasonable communication, but to publish a new article in December with a new level of accusations. In making this publication, Weekly Mirror  did not ask us for any comments, as is common in civilized journalism.

It is also regrettable that the Ukrainian media can unconditionally accuse someone of being a criminal, a “criminal boss” or a “thief-in-law” (the equivalent of a “made man” in Cosa Nostra), which was done in relation to Mr. Tamaz Somkhishvili. At the same time, these accusations were based either on absolutely “garbage” sources cited by the media, or on sources that they themselves created.

Not a single media thought to ask themselves whether Mr. Somkhishvili has ever been prosecuted on such charges. The answer to this question is that Mr. Somkhishvili has never, in all of his more than thirty years of business activity, been charged with any such allegations.

Moreover, in his native Georgia, where Mr. Somkhishvili has a significant part of his business and frequently stays, the mere fact that a person is a “thief-in-law” would already be grounds for criminal prosecution. But for some reason, those media and journalists did not ask themselves why, even in Georgia, he has never been prosecuted for what the media are trying to attribute to him.

The Ukrainian media, like the Ukrainian government, and Ukrainian businesses, have a responsibility to make sure that Ukraine is a country where foreign investors want to come and invest. But will foreign investors be willing to come to a country where they can be falsely accused of something so easily, and yet the accusers not held accountable for such accusations?

In Conclusion

Both foreign and Ukrainian entrepreneurs and investors know that Ukraine has never been a country where it is easy to do business. But can Ukraine afford to remain a kind of “minefield” for foreign investors? Can Ukraine afford to lose the war against corruption? These are not rhetorical questions.

Furthermore, did the authors of these false accusations take into account the consequences for bilateral relations between Ukraine and the UK and Ukraine and Georgia? After all, the accusations concern a British investor and citizen and the treatment they receive in Ukraine.

As for Georgia, with which Ukraine has more complicated relations, do the authors of the accusations realize that, in fact, their accusations mean that Georgian state-owned enterprises run by the Georgian Ministry of Defense are repairing Russian military aircraft, which would be the breach of all international sanctions? How do such accusations help the Ministry of Foreign Affairs of Ukraine in their delicate task of fixing relations with Georgia?

In conclusion, can our country afford a surge of hatred towards foreign investors, in particular those who once made their fortunes in Russia, and yet did that long before the full-scale aggression in 2022, as well as before the beginning of the hybrid war in 2014? After all, it seems that this is exactly the result that “journalists” are trying to achieve by developing the topic of false accusations against Mr. Tamaz Somkhishvili?

Are there not many Ukrainian businessmen, and sometimes even statesmen, who once made their fortunes in Russia when the aggressor-state was trying to pretend to be a civilized and relatively friendly neighbor to Ukraine, and now they lead the country’s struggle against the aggressor-state?

How will inciting this universal hatred, of which corruption is the only beneficiary, while Russia is the beneficiary of the existence of corruption in Ukraine, help Ukraine to win the victory over the aggressor and rebuild our country in the future?

by Taras Dumych, partner at Wolf Theiss

 

Posted in #standwithUkraine