Photo: RFE/RL
— How do you evaluate the reasons behind the sale of Liberty Bank: is it a reaction to the sanctions pressure on Irakli Rukhadze or part of a longer-term strategy to exit the banking sector?
— The owner of Liberty Bank, Irakli Rukhadze, despite his Georgian origins, is a US citizen, which directly subjects him to Western jurisdiction and legal accountability. It is noteworthy that he and his associated assets, including the Imedi TV company, have already come under British sanctions. This creates a situation where his ownership becomes toxic and unacceptable for the Western financial system.
I believe this deal should not be viewed as a healthy business exit typical of a free market. On the contrary, we are dealing with a symbiotic attempt by the state and sanctioned capital to evade legal responsibility and maintain influence over a strategically important banking institution. This bank is the foundation of the state pension system, and therefore its fate is directly linked to the stability of the government.
Consequently, the main issue is the potential fictitious nature of the deal. This means that Basisbank (Hualing Group) may only be becoming a nominal owner so that the bank (Liberty) can formally rid itself of the “shadow” of a sanctioned individual. In reality, beneficial ownership and control may be maintained through a chain of offshore companies, nominal structures, or informal agreements. Such a “window-dressing deal” allows the bank to “cleanse” itself in the eyes of the West, while essentially nothing changes.
These suspicions are reinforced by the unusual “expediency” of the National Bank in processing the transaction. While in other cases such processes drag on for months, here—despite the fact that we are talking about the consolidation of the third and fourth largest banks and a significant redistribution of market shares—the process is moving suspiciously fast.
This indicates that the regulator is fulfilling a political order rather than acting as an independent supervisory body ensuring the unhindered completion of “legal engineering” to bypass sanctions. When property rights become opaque and nominal, it destroys a key market signal—transparency—undermines institutional trust, and leads the country toward international financial isolation.
— Can it be said that in the current political situation, owning a large bank has become a “toxic asset” for Rukhadze, and if so, why?
— From the perspective of financial indicators, Liberty Bank is a healthy and profitable institution; it possesses the largest branch network in the country and a unique retail base, thanks to an exclusive state contract for servicing pensioners. However, it is precisely this scale and strategic importance that make it a dangerous asset in the hands of a sanctioned owner.
From an institutional standpoint, the bank has become “toxic” because, due to sanctions against its owner, it has come under direct fire from the Western financial system. The banking sector, according to the Austrian School approach, is based on trust and full transparency of ownership. When an owner is under sanctions, the bank loses its function as a free economic agent and becomes a hostage to political bargaining. Such “toxicity” threatens not only the specific institution but the entire financial system of Georgia, creating a risk of its isolation from the global financial system.
— What effect does this deal have on Georgia’s banking sector, and how significant is it?
— It is important to note that in this case, we are talking about the third-largest consolidation in the banking sector, with one of the key participants being a bank with Chinese capital. Although Basisbank is formally a private structure, in an authoritarian system, it is obvious that no Chinese company is free from direct dependence on the state.
The short-term “stability” used by the authorities and affiliated experts to justify the deal is an illusion. In reality, we are observing an institutional regression of the banking sector. A dangerous precedent is being set: the fate of a bank is decided not in an open competitive market, but in political corridors. This is a signal to investors that property rights in Georgia have become part of political expediency. Such a process directly contradicts the country’s European aspirations, where transparency and the political neutrality of the financial system are unconditional principles.
— Is the decision to sell the bank to a company linked to China accidental? And what is the benefit for Georgia?
— The growth of the “market weight” of Basisbank’s owner—the Hualing Group—and the obvious facilitation of this process by the authorities are classic examples of so-called authoritarian capitalism. In this model, the state acts not as a neutral arbiter of the free market, but as a conduit for China’s strategic expansion.
In fact, we are witnessing a dangerous merging of private and political interests: for the sake of saving the sanctioned “private” Rukhadze and the political “services” his bank rendered to the ruling regime, a significant part of Georgia’s banking sector is passing under Chinese state control.
Why China? Because Chinese capital, unlike Western capital, does not ask uncomfortable questions about democracy, transparency, or corruption.
This is a model already tested in many developing countries: the regime receives financial resources to maintain power, and in return, the country falls into debt or strategic dependence on China. This is not economic diversification, but a conscious rejection of Western standards in favor of an oligarchic model of Chinese-style management.
— How do you assess the risks, considering Liberty Bank’s role in social payments for a significant portion of the population?
— A bank that services pension and social payments is the country’s social nervous system. Transferring it—even formally—to a group linked to China means that sensitive data and the financial flows of the population could become tools of geopolitical pressure.
It is important to understand that China has already applied similar practices in developing economies. Beijing gains access to strategic resources and information in exchange for financing local government projects. Given current trends, it can be assumed that similar projects in Georgia will be implemented through this banking platform, leading to a critical level of financial dependence on China.
If the deal is indeed fictitious, a double threat arises:
- The hidden influence of sanctioned capital;
- Strategic Chinese access to the country’s internal financial architecture.
This directly damages Georgia’s national interests and its Western integration.
— Could the sale of the bank be part of a bargain with the West or an attempt to attract attention?
— It is a mistake to view this as an element of bargaining or political dialogue with the West. The sanctions against Irakli Rukhadze are an already active legal reality, and his responsibility cannot be eliminated by a formal transfer of property. The West’s sanctions regime is based on strict legal procedures and does not change through such “legal engineering.”
What we are seeing here is not diplomatic bargaining, but the institutional masking of a sanctioned person—a desperate attempt at financial survival and the concealment of real sources of income.
This is an attempt by the authorities to minimize damage to a key private actor—Rukhadze—by attracting Chinese capital. Such a process not only fails to contribute to Georgia’s development within the European space but effectively blocks the restoration of strategic cooperation with the US. On the contrary, this step brings the country closer to states that have sacrificed sovereignty, transparency, and a democratic future for the sake of political expediency and Chinese investment.
Ultimately, the processes surrounding Liberty Bank should be viewed not as an economic transaction, but as a nominal act of evading sanctions organized at the state level. This deal serves not the financial health of the country, but the survival of sanctioned private interests and the opening of a new channel of support for the government through Chinese capital.
From an economic point of view, this is a distortion of the free market and institutional masking; from a pro-Western perspective, it is a catastrophic departure from the Euro-Atlantic course and a plunge into a model of Chinese-style authoritarian capitalism, where sovereignty is replaced by political expediency.
— Is the current visit of Georgia’s Minister of Economy to China evidence of such a reorientation?
— Yes, the high-level meeting in Beijing between Mariam Kvrivishvili and Chinese Minister of Commerce Wang Wentao serves as additional confirmation of this analysis. According to the Ministry of Economy, the parties signed a protocol on amendments to the Free Trade Agreement. The amendments are aimed at “adapting the agreement to modern trade conditions” and “specifying directions for cooperation.”
Kvrivishvili called the changes a “strategically important step” for deepening economic partnership, emphasizing the role of “high-level political interaction.” The Georgian side also declared its readiness to implement a special support program to increase the competitiveness of Georgian exports in the Chinese market.
This accelerated state rapprochement with Beijing acts as a direct backdrop for the Liberty Bank deal and strengthens the argument that the bank’s transition under Chinese influence is part of a broader, politically motivated strategy of pivoting toward authoritarian capitalism.
