Loans for scares In Georgia, a news network’s propagandistic turn and an alleged loansharking scheme lead back to the same London-based firm
In the run-up to this month’s parliamentary vote, Georgia’s political crisis has continued to spiral on both the domestic and foreign policy fronts, with the ruling Georgian Dream party cracking down on journalists and civil society, curtailing LGBTQ+ rights, and completely alienating Western partners in the process. Reporting for The Beet, Tbilisi-based journalist Will Neal pieces together the election-time controversies surrounding Georgia’s largest television network, Imedi TV, and its third-largest lender, Liberty Bank. What do these two have in common? Well, they’re both owned by Hunnewell Partners, a London-based private equity firm that’s no stranger to U.K. courts and no friend to Georgia’s main opposition force. As it happens, a lawsuit accusing Liberty Bank of loansharking Georgian pensioners has been languishing without a court date since February — and the claimants believe this is a quid pro quo for Hunnewell marshaling Imedi TV to boost the ruling party’s campaign messaging.
This story first appeared in The Beet, a weekly email dispatch from Meduza covering Central and Eastern Europe, the Caucasus, and Central Asia. Sign up here to get the next issue delivered directly to your inbox.
Overlooking Tbilisi’s streets, a split-paneled billboard offers an apocalyptic vision of Georgia’s future. To the right, a sunlit profile of the city’s gold-topped Sameba Cathedral. To the left, the hollowed remnants of a bombed-out Ukrainian church rendered in black and white. “Say No To War — Choose Peace,” the banner reads.
This image is part of a new series of campaign ads the ruling Georgian Dream party released just weeks before the country’s parliamentary vote. On October 26, Georgians will head to the polls for elections widely billed as a referendum on the fate of this historically Western-facing nation’s fledgling democracy.
After two and a half years under the shadow of Russia’s war in Ukraine, the Georgian Dream government has consummately sabotaged relations with Western allies, portraying the U.S. and the E.U. as a conspiratorial “global war party” hell-bent on dragging them into the ongoing conflict, while reorienting the country towards Moscow and embarking on a wholesale slide into violent authoritarianism. Against a backdrop of the U.S. suspending aid and sanctioning senior officials, and an indefinite halt to E.U. accession talks despite around 80 percent of the population supporting membership, the Georgian government recently pledged to outlaw virtually all political opposition, should it emerge victorious later this month. Fears of election rigging, already widespread, continue to grow.
Drawing on inside sources, court documents, media monitoring reports, and victim testimony, The Beet can now reveal how, behind the scenes, a British private equity firm appears to be leveraging this ever-deepening political crisis for its own gain. Risen from the ashes of a Russian-made billionaire’s once vast empire, Hunnewell Partners stands accused of using its control of Georgia’s largest television network to bolster the ruling party’s reelection campaign — in exchange, critics say, for authorities turning a blind eye to the alleged exploitation of possibly hundreds of thousands of Georgian pensioners.
Editor’s note: This story was updated with comments from Liberty Bank on November 22, 2024.
‘Frogs in boiling water’
Imedi TV broadcasts some of Georgia’s most beloved shows, from soap operas and musical showcases to syndications of global franchises like Dancing With the Stars and Georgia’s Got Talent. Despite the immense popularity of its entertainment programs, however, the pro-government channel has been bleeding news staff, with at least seven journalists quitting in the past year alone.
“Today, my former colleagues are participating in a campaign that, in my firm belief, will undermine Georgia’s Western future for a very long time,” said Rusudan Shelia, the former head of Imedi’s Washington, D.C. office. “I could never be a part of that. I grew up believing that my country should be independent and free from Russian influence, having [already] experienced what that means: war, violence, and oppression.”
Partisan broadcasting is nothing new in Georgia, and since its founding in 2001, various political actors have used Imedi TV for their own ends. But since Russia’s 2022 invasion of Ukraine, the station’s pro-government bent has deepened to the point of propagating false or otherwise highly misleading claims espoused by senior Georgian officials, as part of what critics describe as an anti-Western disinformation campaign.
The Media Development Foundation (MDF), a local press watchdog, has documented these broadcasts and posts extensively. Key examples include false reports that California permits gender-affirming surgery on children without parental consent, repeating former U.S. presidential candidate Robert F. Kennedy Jr.’s false claims about Ukraine transferring state-owned assets to American corporations in exchange for reconstruction aid, and suggesting Georgia’s notoriously corrupt judiciary is more impartial than U.S. courts.
Others have featured manipulated quotes from foreign officials, giving the impression of E.U. indifference toward the Georgian government’s controversial “foreign influence” law, or that President Volodymyr Zelensky concedes NATO expansion caused the war in Ukraine (a favored Putinist narrative).
“They’ve been capitalizing on three main topics ahead of the election: war, sovereign democracy, and identity-related issues,” said Tamar Kintsurashvili, MDF’s executive director. “The whole idea is to show there is no democracy in the West; to sow distrust in the liberal order because those ‘perverts’ are ultimately too weak to protect us.”
Some of Shelia’s former Imedi colleagues, who requested anonymity for fear of reprisals, told The Beet this shift didn’t happen overnight. “It’s like a frog in boiling water — you start out cold, and then it warms up and warms up and eventually, the frog forgets to jump out,” one person said. “The rhetoric they’re using now, it’s one-and-one with the government — whether it’s an anchor speaking or a minister, the mouth doesn’t matter.”
Another source claims that representatives of the Georgian government’s Department of Strategic Communications provide much of this messaging to Imedi’s producers directly (though other sources spoke of government interference, they didn’t mention the StratComs department specifically). Currently headed by a former Imedi news chief, the strategic communications initiative lost NATO backing this year after multiple reports exposed it for using troll accounts to promote Russian-style disinformation online. The Beet’s sources also say there’s been a concerted push to exclude critical voices from Imedi’s coverage, as well as an emphasis on labeling the opposition as “radicals” and “liberal fascists.”
“The goal, uniformly, is to discredit the opposition. There are certain phrases and specific wording you have to use in these reports,” another source said. “Initially, at least, we would get everyone’s opinion. Then it was if they didn’t like the opinion, they might not use it. Now, they don’t even bother to obtain anything different from the line they want you to take.”
Imedi’s owners haven’t exactly kept the newsroom at arm’s length. Irakli Rukhadze — a dual Georgian-U.S. citizen, one of Hunnewell’s founders, and chairman of Imedi’s supervisory board — has repeatedly appeared on broadcasts to express support for the government’s actions and rail against the country’s largest opposition group. “[United] National Movement and its affiliates […] have never returned to the leadership of this country. This is the mission I have; [it’s] why Imedi exists,” Rukhadze told reporters in September, having previously said he would “use all legal methods” to sideline UNM.
In comments to The Beet, Rukhadze rejected the notion that Imedi TV is toeing the ruling party line. “It is no secret that I am personally opposed to [Mikheil] Saakashvili’s United National Movement. However, Imedi is committed to professional standards of reporting, so I strongly deny any accusation of propaganda,” he said. Rukhadze further clarified that he does not consider himself “against the Georgian opposition in general [but] specifically against UNM and parties managed by former senior UNM officials.”
“I am a U.S. citizen and strongly believe that Georgia’s future lies within the E.U. Neither I nor Imedi TV is anti-Western,” he added. Imedi TV did not respond to The Beet’s request for comment.
First Badri, then Bidzina
Hunnewell’s wild and winding history begins with Arkady “Badri” Patarkatsishvili, a flamboyant and hard-living Georgian billionaire who made his fortune in Russia during the Soviet Union’s collapse. Patarkatsishvili’s business partner, fellow oligarch Boris Berezovsky, was known for boasting about how they helped engineer Vladimir Putin’s first electoral victory in March 2000. But the pair soon fell foul of the new Russian president and Patarkatsishvili fled to Tbilisi the following year.
Having initially backed Georgia’s nascent United National Movement government following the 2003 Rose Revolution, Patarkatsishvili soon began pursuing his own ambitions for office, culminating in an all-out political war with then-President Mikheil Saakashvili that drove him into exile. The billionaire suffered a resounding electoral defeat in 2008, just days before dying of a heart attack at his luxurious second home in the British countryside.
In the weeks after his death, it emerged that Patarkatsishvili failed to leave behind a will and that little of his estimated $12-billion fortune was actually held in his name. In turn, this sparked what Vanity Fair described at the time as one of the biggest estate battles in legal history: a bitter showdown between Patarkatsishvili’s various business partners and relatives that is ongoing to this day.
Three of Patarkatsishvili’s former associates, including Irakli Rukhadze, established Hunnewell Partners in the U.K. in 2011 to recover the late oligarch’s assets on behalf of his family. They would go on to receive some $260 million in bounty fees and gain ownership of some of his former assets in Georgia — among them, Imedi TV.
The process proved far from smooth, however, with one former associate suing Hunnewell in 2016 for cutting him out of the deal with Patarkatsishvili’s family. The U.K. High Court later ruled that Rukhadze and his partners had breached their fiduciary duties to their erstwhile associate’s companies and engaged in a “commercial conspiracy,” ordering them to pay roughly $173 million in damages. Rukhadze and his partners are currently appealing the ruling in the U.K. Supreme Court.
According to fund manager and former Rukhadze business associate Giga Bedineishvili (who’s a litigant in the commercial conspiracy case), Hunnewell worked hard to establish itself as one of the most politically connected operators in Georgia. In addition to owning Imedi TV, for example, the group holds a significant stake in HeidelbergCement Georgia, a co-venture with a private equity fund set up by local oligarch and Georgian Dream founder Bidzina Ivanishvili.
Like Patarkatsishvili, Ivanishvili made his billions during Russia’s privatization rush in the 1990s. Having retreated to the shadows for much of the past decade, Ivanishvili returned to frontline politics earlier this year to steady his party’s ship amid Georgia’s broader political crisis. Credited with minting the “global war party” conspiracy theory, he is widely seen as the driving force behind Georgian Dream’s autocratic, anti-Western pivot since Russia’s full-scale invasion of Ukraine. Despite condemnation from the E.U. parliament and reports that Washington is preparing to take measures, Ivanishvili has escaped Western sanctions thus far.
“The most political project in Irakli [Rukhadze]’s pocket is Imedi. The motivations for cement were economic, but Imedi?” said Bedineishvili. “He’s into it head first, really. He’s completely doubled down on it — he runs Ivanishvili’s propaganda for him, but he also does it all for himself.”
‘Loans piled on top of poverty’
Another of Hunnewell’s key assets in Georgia is Liberty Bank. The country’s third-largest lender, Liberty holds a monopoly on issuing all pensions and welfare payments, and like Imedi TV, has Rukhadze as a member (formerly, the chairman) of its supervisory board. It’s also facing a daring legal complaint by one of Georgia’s smallest political opposition groups.
Lawyers Ketevan Turazashvili and Giorgi Rekhviashvili from the pro-E.U. party Citizens have filed a lawsuit against Liberty Bank in the Tbilisi City Court for alleged involvement in a multifaceted scheme to systematically exploit up to 354,000 retirees (the equivalent of about 40 percent of Georgia’s elderly population).
The substance of Citizens’ lawsuit, seen by The Beet, concerns two pensioners who, in 2019, were allegedly led to believe they had taken out “pension loans” when Liberty had actually issued them high-interest overdrafts. According to the court case, bank employees failed to clarify to the borrowers that the ensuing deductions from their monthly pensions only covered interest payments, leaving them unaware that they weren’t paying off the original loan. As a result, the retirees paid back significantly more than they’d borrowed — without reducing the principal loan amount “even after five years.”
“Our pensioners live in destitution. These ‘loans,’ piled on top of poverty, mean they cannot buy medicine, they cannot buy enough food,” said Turazashvili, who is also an MP. “We’ve heard one story about a couple whose only child had died — they couldn’t afford to pay for the funeral, and they’re still trying to pay off the ‘loan’ they were given all these years later.”
Though the suit only references two alleged cases, Citizens’ lawyers maintain this is a widespread practice at Liberty, claiming to have heard from thousands of other pensioners they suspect the bank has misled in the same way. The lawyers also claim the interest automatically deducted from retirees’ monthly pensions sometimes ran as high as 40 percent. This is in addition to the bank granting pensioners several months’ “relief” during the 2020 coronavirus pandemic, allegedly without making clear to them this would incur three to four more years of pension deductions.
Georgia’s National Bank recently lowered interest rates on pension loans and overdrafts taken out before January 1, 2023, after Citizens petitioned regulatory authorities to intervene. According to acting National Bank Governor Natia Turnava, the reduction affected loans made to more than 150,000 pensioners “with an average interest rate of more than 30 percent.” According to media reports and recent loan agreements seen by The Beet, Liberty charged interest rates of about 29 percent as of 2023.
While Liberty Bank did not respond to The Beet’s request for comment, Rukhadze denied having any knowledge of the Citizens lawsuit. At the same time, he claimed the “overcharging of pensioners was a practice that took place before Hunnewell Partners’ involvement” with the bank. “Since we bought Liberty Bank in 2018, we have decreased interest rates charged to pensioners three times, bringing them in line with market rates,” Rukhadze said.
‘Bandits! Fascists!’
The Beet independently interviewed at least ten Georgian retirees whose testimony seemed to corroborate the allegations outlined in the Citizens lawsuit.
“My diabetes requires a lot of care. I need a lot of medication, and my pension is not enough at all,” said Mariam. The 77-year-old, whose name has been changed, says she borrowed money from Liberty to pay back a friend who had stood her the cost of emergency medical treatment. “I got the money, but they put down a bigger figure than I asked for — I wanted 700 lari [$256], but they put 1,000 [$366]. It’s impossible because there are so many documents, and without my glasses, I missed that and wound up having to pay more.”
Mariam’s 80-year-old sister, Tamar (name also changed), borrowed money from Liberty Bank to pay for medical treatment, too. “There is no proper medical insurance in Georgia,” she said. “These people are bandits, fascists!”
Liberty Bank’s reported pension loan portfolio totaled $153 million in the second quarter of 2024. In a country where the average annual pension barely tops $1,300, Turazashvili and Rekhviashvili estimate that if their findings hold true across the 354,000 Georgian retirees who have taken out pension loans, these interest payments may be netting Liberty tens of millions of dollars a year. While they hope their lawsuit will eventually set a strong precedent — emboldening other pensioners to take independent legal action against the bank — they have yet to receive a court date, eight months after filing their claim.
The lawyers believe the significant delay signals a deliberate effort to frustrate the proceedings, a claim Rukhadze dismissed as “ridiculous.” “Any suggestion that we have tampered with the court process (or could do so) is denied,” he told The Beet. “I repeat, I have not even heard about this lawsuit, which appears to be completely baseless in any case.”
Nevertheless, Turazashvili remains resolute, arguing that the lawsuit is unlikely to amount to anything should the Georgian Dream government remain in power after the October 26 elections. “[It’s] because Irakli Rukhadze is the owner of Imedi TV. All the time, this channel pushes the government’s propaganda, saying only good things about the ruling party and spreading lies about the opposition,” she said. “I think this is a favor from the government to Rukhadze — you can do everything you want to do, […] and we will close our eyes to that.”
Update: After publication, a representative of Liberty Bank contacted Meduza with a response to a request for comment sent on October 4, 2024. The representative said the bank denies “in the strongest possible terms” any claims it may have used political influence to engage in judicial interference, and that delays to legal proceedings are “a particular issue in Georgia” due to “problems related to a lack of administrative support and judicial workloads.” The representative also claimed that since its 2017 acquisition by Hunnewell Partners, Liberty Bank has followed “all regulatory guidance and the best practice for Georgian banks” and “dynamically reduced” interest rates on “pension loans.” Liberty Bank takes its legal responsibilities “extremely seriously,” they added.
Hello, I’m Eilish Hart, the editor of The Beet. Thanks for taking the time to read our work! Our newsletter delivers underreported stories like this one to subscribers every Thursday. Like all of Meduza’s reporting, it’s free to read but relies on support from readers like you. Please consider donating to our crowdfunding campaign.
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Story by Will Neal for The Beet
Edited by Eilish Hart
Will Neal’s reporting for this story was supported by the Civil Society Foundation, formerly the Open Society Georgia Foundation