Mikhail Fridman's business interests in Georgia

News | Memory and Disinformation Studies | Social and Economic Policy | Article 9 December 2022

Russian oligarch and the alleged co-owner of Borjomi, Mikhail Fridman was arrested in London on money laundering charges. Until now, Borjomi has not publicly published information on whether Mikhail Fridman still owns a share in the company.


Russian multimillionaire Mikhail Fridman, who was arrested on charges of money laundering in London on December 3 and then released on bail, was the co-owner of Beeline (also known as Veon Georgia) in Georgia, which was acquired by the Georgian holding CBS Group in June 2022. In addition, the Alfa Group founded by Fridman purchased Borjomi from the Patarkatsishvili family for 300 million US dollars in 2013, after which it became the owner of 60%, the majority owner of the company.


According to the public register, the official name of Borjomi is IDS Borjomi Georgia LLC, whose founder is IDS Borjomi Beverages Company, registered in the Netherlands Antilles. The company, mentioned above, is registered offshore, which makes it difficult to determine its ultimate beneficial owners.


After Russia's invasion of Ukraine and the start of a full-scale war, Borjomi stopped production, citing international sanctions as the reason. The stoppage of Borjomi caused protests by the employees, which was soon followed by Prime Minister Irakli Gharibashvili's statement on June 13, according to which part of the shares of Borjomi company was transferred to the state, although the Prime Minister did not specify how many shares the state became the owner of.


Later, according to the statement of IDS BORJOMI International, it was revealed that the company's controlling shareholder (Fridman) would transfer a 7.73% share to the Georgian government. The company did not disclose how the remaining shares would be distributed after the transfer of the 7.73% stake to the state. However, according to the company, as a result of the agreement:


  • Friedman would no longer have the controlling function of IDS BORJOMI International.

  • The representation of the controlling shareholder in the board of directors of IDS BORJOMI International would be reduced from 8 to 2 members.

  • The Chairman of the Board of Directors of IDS BORJOMI International would be a representative of the Government of Georgia.


In December 2022, Borjomi Company refused to provide additional information about how the Georgian side would have a controlling function in light of insufficient shares. As was already mentioned, due to the registration of the company in the offshore zone, it is not possible to verify the information on the distribution of shares among the final owners.


Accordingly, it is not yet known how the government fulfills its promise to eliminate problems in the operation of Borjomi and it is also unknown what direct effects the criminal case against Mikhail Friedman in Britain will have on the activities of the Borjomi company.


In addition, you can see a detailed study of IDFI - Russian capital in Georgia about Russian businesses in Georgia.


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