09TBILISI398, GEORGIA: ACTION REQUEST FOR DEPARTMENT GUIDANCE –

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Reference ID Created Released Classification Origin
09TBILISI398 2009-02-27 12:15 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO4746
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0398/01 0581215
ZNY CCCCC ZZH
O 271215Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1078
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 TBILISI 000398 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 08/25/2018 
TAGS: PGOV PHUM PREL GG
SUBJECT: GEORGIA: ACTION REQUEST FOR DEPARTMENT GUIDANCE - 
IMEDI TV 
 
Classified By: AMBASSADOR JOHN F. TEFFT.  REASONS:  1.4 (B) AND (D). 
 
1.  (C)  Summary:  Mark Hauf, attorney for Ina Gudavadze, 
widow of Badri Patarkatsishvili, has repeatedly approached 
the Ambassador and other Embassy officials and requested that 
Post advocate on behalf of Gudavadze with the Government of 
Georgia.  Specifically, Hauf requests that Post demand that 
the GOG return Imedi TV to Gudavadze.  Imedi resumed its news 
broadcasts in fall 2008 after being off the air for nearly a 
year after the Government closed it down in November 2007. 
Rak Georgia Holding (a subsidiary of Rakeen Group 
headquartered in the United Arab Emirates) purchased a 90 
percent stake in Imedi TV from the previous owner Joseph Kay, 
an American citizen and distant relative of Patarkatsishvili, 
on February 25.  Kay retains a 10 percent stake in Imedi. 
Gudavadze claims an ownership stake in Imedi by virtue of 
being the widow of Patarkatsishvili who controlled the 
company through a nominal third party owner; however, 
Gudavadze has not filed a case in the Georgian courts to 
recover this asset.  Because of its connection to the 
November 7 demonstrations, Imedi and its legal status has 
become a rallying cry for the opposition. 
 
2.  (SBU)  Action Request.  Post requests that Department 
provide clear guidelines to respond to requests for political 
advocacy on behalf of Gudavadze and other interested parties. 
 Suggested Department Guidance for Post is as follows: 
Start Suggested Text:  The control of Imedi TV is a legal 
dispute between private parties.  As a matter of policy, the 
USG does not intervene is such disputes and is unable to 
advocate on behalf of any party.  The proper venue for the 
settlement of this legal dispute is through the court and 
arbitration system. End Summary and Suggested Text. 
 
BACKGROUND 
 
3.  (SBU)  Prior to his sudden death and consistent with his 
normal course of doing business, wealthy Georgian businessman 
and government opponent Badri Patarkatsishvili created a 
complex structure of ownership of Imedi media in order to 
disguise his ownership interest in the network.  Joseph Kay 
claims to be and is generally recognized under Georgian law 
as the current rightful owner of Imedi.  Kay is a relative of 
Patarkatsishvili by marriage.  Although virtually unknown to 
the Georgian public, he had long-standing business and family 
ties with Patarkatsishvili.  Giorgi Jaoshvili, the previous 
nominal owner of Imedi at the end of Patarkatsishvili,s 
life, confirmed that he has known Kay since the early 1990s, 
and that Kay was a confidant of Patarkatsishvili. 
 
4.  (SBU)  According to Kay,s lawyers, Kay was given 
Patarkatsishvili,s will which specified how the estate was 
to be divided and named Kay as the executor.  Kay claims that 
he is the executor of Patarkatsishvili,s estate, but is not 
an heir to any of Patarkatsishvili,s holdings.  Jaoshvili 
also confirmed that when Kay told him that he was named as 
executor of Patarkatsishvili,s will and estate, it seemed 
logical.  Kay had been granted conservatorship (a temporary 
injunction giving Kay power over the estate but limiting his 
ability to formally dissolve the estate) over 
Patarakatsishvili,s estate by a Tbilisi court.  On February 
20, Kay was formally adjudicated executor of 
Patarkatsishvili,s estate by a Tbilisi court.  On February 
25, Kay sold 90 percent of Imedi to Rak Georgia Holding (a 
subsidiary of Rakeen Group headquartered in the United Arab 
Emirates). 
 
TRANSFER OF IMEDI 
 
5.  (SBU)  Kay,s lawyer claimed that Kay told him that 
Patarkatsishvili was engaged in some kind of political 
QPatarkatsishvili was engaged in some kind of political 
negotiation with the Government of Georgia shortly before his 
death and that Imedi was the focus of the government's 
interest.  The nominal head of Imedi, Jaoshvili, confirmed 
that Patarkatsishvili had told him directly that he 
(Patarkatsishvili) directed Kay to negotiate with the 
Government of Georgia in November 2007 after Patarkatsishvili 
was exposed as plotting a coup d,etat.  In order to 
facilitate Patarkatsishvili,s settlement with the 
government, Kay purchased the ownership of Imedi from 
Patarkatsishvili, 14 days before Patarkatsishvili,s death. 
Patarkatsishvili sold his majority stake of Imedi (held by 
Jaoshvili) to Kay for four reasons: Kay is a US citizen; Kay 
was a relative of Patarkatsishvili,s; Kay was a businessman 
who knew how to run a business and could keep the station 
alive; and the government knew that Kay had no political 
ambitions and may have agreed that Kay was an acceptable 
owner of Imedi from their perspective. 
 
6.  (SBU)  Following Patarkatsishvili,s death, Kay came 
forward with a document signed by Patarkatsishvili which 
 
TBILISI 00000398  002 OF 003 
 
 
directed Jaoshvili to transfer his majority shares of the 
Imedi holding arrangement to Kay.  Jaoshvili transferred the 
shares to Kay but now claims he did so under duress.  No one 
with direct knowledge of what went on re
garding the transfer 
of Imedi has told Embassy Tbilisi anything other than 
Patarkatsishvili transferred the company to Kay.  Former 
Imedi broadcaster, Giorgi Targamadze (Member of Parliament 
and leader of the opposition Christian Democratic Party) 
believed the transfer was legitimate.  Bidzina Baratashvili, 
long-time manager of Imedi, told Post the same thing: 
Patarkatsishvili explicitly directed Jaoshvili to transfer 
Imedi to Kay. 
 
7.  (SBU)  Kay,s lawyers claim that no one has challenged 
the ownership of Imedi in any court. Three out of four cases 
contest Kay,s executorship of the estate. The fourth case 
contests the identity of Patakartsishvili,s legal spouse. 
All disputes and discussions regarding Imedi,s ownership 
have been carried out in the media.  Each of the four law 
suits has been filed in a separate country. 
 
THE COURT CASES 
 
8.  (SBU)  Case One: Filed in Moscow by Ina Gudavadze, 
Patarkatsishvili,s first wife, against Olga Saponova the 
second wife. The Moscow court ruled in Gudavadze,s favor 
that Saponova was not Patarkatsishvili,s legal wife at the 
time of his death, but Gudavadze was.  Adding further 
complications, in 1994 Patarkatsishvili and Gudavadze signed 
a document in which they stated that they had no marriage 
relationship, but for the sake of the children they were not 
divorcing, however; Gudavadze agreed to waive any and all 
property rights beyond what Patarkatsishvili specified in 
other documents. Gudavadze has admitted to signing this 
agreement. 
 
9.  (SBU)  Case Two: Filed in New York against Kay by 
Gudavadze who claims that Kay is not the executor of the 
estate.      This case is currently pending dismissal on 
jurisdictional grounds.  Kay,s U.S. attorneys say this case 
will be dismissed; Patarkatsishvili was not a U.S. citizen, 
so a probate case for Patarkatsishvili should not be tried 
there. 
 
10.  (SBU)  Case Three: Filed in Gibraltar by Boris 
Berezovsky and Gudavadze questioning Kay,s status as the 
executor (there may be additional claims).  Kay has his own 
holdings which are administered in Gibraltar and some of 
Patarkatsishvili,s holdings are also administered there 
(these include real estate in Gibraltar and elsewhere). 
Gudavadze claimed that Kay,s holdings were in fact 
Patarkatsishvili,s and filed suit to get control of them. 
According to the lawyers she brought a witness who claimed 
Kay,s holdings were really Patakartsishvili,s but then 
later admitted he received a bribe to testify falsely against 
Kay.  This case is currently pending with the court having 
placed the burden of proof on Gudavadze, who has so far 
produced no evidence that Kay,s holdings were 
Patarkatsishvili,s. 
 
11.  (SBU)  Case Four: Filed in Tbilisi by Gudavadze to take 
control of all Patarkatsishvili properties and remove them 
from Kay,s control (this does not include Imedi). This case 
was decided in favor of Kay on February 20.  The court held 
that Kay is the proper executor of the estate.  Gudavadze has 
protested the decision in the press and may choose to appeal. 
 
 
POSSIBLE ARBITRATION CLAIM 
 
12.  (SBU)  Gudavadze, per information from her lawyer Mark 
Hauf, has sent notice of intent to pursue international 
arbitration against various organs of the Government of 
Georgia to regain Imedi.  However, the Government has not 
responded to this notice, nor has it confirmed it has 
Qresponded to this notice, nor has it confirmed it has 
received such notice.  Kay,s lawyers claim they know nothing 
about this, but they are not respondents on the notice of 
arbitration.  The claim on the notice alleges the GOG 
conspired to wrongfully expropriate Imedi.  The 
jurisdictional basis for the claim is that foreign investors 
per Georgian law can file for international arbitration in 
certain business disputes.  However, Gudavadze is Georgian so 
it is unclear if the arbitration provision applies in this 
case regardless of the merits.  Additionally, notice claims 
that Gudavadze has some ownership right in Imedi by virtue of 
being Patarkatsishvili's widow which would appear to make it 
a probate claim, rather than investment claim, also rendering 
it improper for arbitration. 
 
GUDAVADZE VERSION OF EVENTS 
 
 
TBILISI 00000398  003 OF 003 
 
 
13.  (SBU)  Hauf dismisses the GOG's claims that the 
temporary seizure of Imedi was necessary because of evidence 
that Patarkatsisvili was leading a coup d'etat.  Hauf says 
the GOG wanted control of Imedi to silence an independent 
voice.  Hauf claims that straw owner, Jaoshvili was 
forced/coerced into handing over Imedi to Kay by the GOG 
after Patarkatsishvili's death.  Hauf maintains that Imedi 
was illegally seized and rightly belongs to Gudavadze. 
 
RECENT SALE 
 
14.  (SBU)  On February 25, Joseph Kay sold a 90 percent 
share to UAE-owned AK, a subsidiary of a prominent investor 
in Georgia Rakeen group.  A representative of RAK Georgia 
Holding, Mark Monem publicly stated RAK intends to run Imedi 
as an independent channel.  Monem said he was certain that 
Imedi would turn into a financially strong organization with 
the help of RAK investment.  Monem said RAK intends to allow 
Imedi to pursue an objective and unbiased editorial policy. 
 
EMBASSY COMMENT 
 
15.  (C)  Embassy Comment: Because Patarkatsishvili operated 
mostly in the shadows and hid his assets under various shell 
companies and legal fictions, it is very difficult to 
ascertain to any degree of certainty what Patarkatsishvili 
did or did not control and how he distributed it.  Despite 
this fact, all of the evidence available to Post suggests 
that Patarkatsishvili knowingly and purposely effectuated the 
transfer of Imedi TV to Joseph Kay.  Gudavadze has pursued 
court proceedings regarding Patarkatsishvili's estate in four 
different legal fora.  However, all of the evidence available 
to Post is that Imedi TV has never been subject to any legal 
proceeding initiated by Gudavadze or any other potential 
claimant.  As such, we believe it would be improper for Post 
to politically advocate for the transfer of Imedi TV to 
Gudavadze, especially considering Gudavadze is asking Post to 
pursue a claim politically that she has not pursued legally. 
End Comment. 
TEFFT

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