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Owner asks rep. for help

Man who co-owns businesses in Georgia says he has lost millions as officials have taken control of property.

November 17, 2008|By Candice Baker

Rep. Dana Rohrabacher is working to help a Huntington Beach entrepreneur bring attention to a business conflict that extends halfway around the world, to Georgia in Central Asia.

Ilya Zhuganov said he has had two businesses destroyed by governmental corruption, and has been stonewalled for more than a year in his attempts to reclaim his right to do business.

“I started iZee Enterprises back in 2001, and at that time we started doing business in Kazakhstan,” Zhuganov said.

The company distributed Sony products.

The business operators soon met a Sony representative from Ukraine who eventually worked with iZee to become the sole authorized Sony dealer in Georgia, opening a business called Lazeri-2 and a Sony Center store.

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Zhuganov’s company later decided to become a 50% shareholder of Lazeri-2, the owners of which also operate neighboring Café Rustaveli restaurant, on what Zhuganov said is the equivalent of Rodeo Drive in Tbilisi, Georgia’s capital.

Mzia Kakabadze, the building owner, leased the store and restaurant spaces to the business owners until 2015 and 2019, respectively, Zhuganov said.

All was going well, until everything changed in November 2006.

“The minister of economic developments of Georgia came in and coerced Kakabadze to sign away her building in exchange for a smaller one in a worse area,” Zhuganov said.

Rohrabacher said in his letter that Kakabadze signed an affidavit stating that ministry officials threatened Kakabadze with harm to her family if she didn’t “gift” the property to the officials.

She has since scheduled a court date, which has been stalled, Zhuganov said.

“You see, Georgia is trying to be pro-Western, but some Soviet corruption is still in there, obviously,” Zhuganov said. “They sent a letter saying we have to vacate the premises. We told them, ‘You can’t just kick us out. We have a long lease.’”

Georgian officials contended the leases were due to expire much sooner. The Georgian government contends it made a fair exchange for the stately building, but Zhuganov objected.

“You could make millions on that thing,” he said. “We’re hearing rumors that they want to sell it to Hilton.”

Zhuganov’s company has gone back and forth with the Georgian government for more than a year over the breach of contract, he said.

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