TBC Bank Group PLC (LON: TBCG) confirmed today that its subsidiary TBC Bank JSC has been subject to an inspection by its regulator, the National Bank of Georgia, relating to certain transactions which took place in 2007 and 2008.
The inspection alleges that these transactions between TBC Bank and certain entities (which, in NBG’s opinion, were related to the Chairman and Deputy Chairman) were not in technical compliance with the relevant Georgian law relating to the regulation of conflicts of interest. The relevant transactions, which took place several years before the initial public offering in 2014, were already the subject of an inspection by the NBG in 2008, which did not result in any action being taken at the time.
NBG has issued a fine of about GEL 1 m and, at this stage, it is unclear whether NBG will seek to impose additional sanctions. TBC has already challenged this fine in the courts in Georgia and the court has issued an injunction suspending payment of the fine. It is noted that the Georgian Office of Public Prosecution has also launched an investigation into the same matter. TBC Bank refutes the allegations relating to these historic transactions and intends to vigorously defend its position.
It is not currently expected that these matters will result in any material consequences for the group.
TBC Bank Group PLC state a further announcement will be made in due course.