When the Georgian national lottery resumes operation, it will be owned by two experienced businessmen. Only one is nicknamed “The Skull”.
On August 4, the Georgian national government sold 25 percent of the lottery shares to Vasil Bozhkov, a well-known crime figure who successfully operated gambling businesses in Bulgaria.
The other 75 percent went to a company owned by Georgia businessman Koba Ghurtskaia, whose holdings in telecommunications include ties with Bulgaria.
According to the tender agreement, the two men should have paid at least $US5 million to take over the lottery from the Georgia Ministry of Finance (see page 6). The Ministry lost about $90 million since August 2011, when it was given majority control of the lottery by the 24-year-old brother-in-law of former Minister of Defense David Kezerashvili . The ex-minister fled Georgia after being accused of stealing tens of millions in cash and properties.
On September 1, the lottery was temporarily shut down. (OCCRP story)
The recent tender required that the new ownership have at least five years experience operating a lottery. (see page 20) Bozhkov surely has the experience.
Bozhkov earned his nickname “The Skull” because of the unusual shape of his head. His involvement in the Georgia lottery was first reported by on.ge.
His background in the betting business goes back to the early 1990’s as Bulgaria emerged from the Communist era. He registered a financial company Nove in 1992 and a betting company Eurofootball in 1993 . Both companies under slightly different names are still active.
In 1993 Bozhkov was a co-founder of the gambling and casino company IGM. Another co-founder, businessman Ilya Pavlov, was shot and killed in 2003 one day after he testified in the murder trial of former Bulgaria prime minister Andrey Lukanov. IGM was for several years the biggest player in Bulgaria’s gambling market.
A 2005 US State Department cable on Bulgarian organized crime published by Wikileaks offers a stunning description of Bozhkov’s activities, listing money laundering, privatization fraud, intimidation, and extortion and racketeering, along with close ties to other organized crime groups.
The new lottery majority shareholder Ghurtskaia is the chief executive officer of CBS Group, whose Georgian companies include internet providers Caucasus Online and Beeline, Railway Telecom, the GMC Group of upscale Tbilisi restaurants, and Tbilisi’s municipal minibus company. He is also the majority shareholder in the Iberia Wine Company.
Caucasus Online holds 100 percent of the shares of Caucasus Cable System Bulgaria , a company registered in Sofia. Caucasus Online and the Bulgarian company Sofia Connect created Caucasus Cable System to lay a submarine cable across the Black Sea. It’s an important internet route between Europe and the countries of the Caucasus and the Middle East.
Ghurtskaia is also an investor in Georgian Service Network, a company that serves as representatives in Georgia for Daisy Technology, a Bulgarian company that services retail store credit card scanners among other activities.
The Georgia lottery plans to begin selling tickets again in February. The Ministry of Finance refused to comment on why it approved Bozhkov for ownership. Attempts to get CBS Group to comment on Bozhkov were unsuccessful.
Author: Atanas Tchobanov, Bivol.bg and Nino Shonia, ifact.ge