Irakli Alasania Raises Questions and Requests Guarantees About Government’s IPO Plans
Free Democrats leader Irakli Alasania recently released an open letter addressed to Georgian Prime Minister Nika Gilauri raising questions and requesting guarantees about the Georgian government’s plans for an Initial Public Offering (IPO) of 20-25 percent of the shares of strategically-vital companies. As a party committed to free markets as well as the protection of fundamental freedoms, Alasania stressed that the Free Democrats are not concerned so much with the concept of this privatization, but of the thinking behind it and the larger vision it serves.
At issue are stakes in the Georgian National Railways, the Georgian National Oil and Gas Company (which controls the gas pipeline to Armenia), as well as Electrosystem, all of which can be considered strategic assets currently under the government’s control. Speaking of the government’s plans, about which only cursory information has been released, Alasania warned of serious risks.
“As we know, the global stock markets are currently in a state of crisis, so under the current conditions, these strategically-vital companies will likely be undervalued and the shares possibly sold for a fraction of their actual worth,” Alasania pointed out in the letter, adding “the public has an interest in knowing more about the time of this IPO and how it relates to a longer-term, and we can only hope, carefully thought-out government plan.”
“When shares of companies are offered on international markets, the management of those companies must comply with international standards, yet the financials of these companies have not yet been released to the Georgian public. One must assume they’ve been audited, shouldn’t those reports also be released to the Georgian media? Financial accountability standards demand they should.”
The third point in Alasania’s letter expressed a mounting public concern about the planned IPO, namely whether Georgia’s interests are being adequately protected in the deal.
“Over the past several years we have seen a pattern of sell-offs of strategic assets, including the ports of Poti and Batumi. In the case of Poti, the investor flipped the asset after only two years without meeting its investment obligations and a substantially higher price. How do we know we are not looking at a repeat of this experience, and, more importantly, how can the government assure the citizens of Georgia that the country is not relinquishing its control of these assets to its neighbors—including those who recent actions have threatened to undermine our very sovereignty? The Georgian people deserve an answer to these important questions.”