Moulds and Metals Georgia LLC

Corporate Dispute in the Metallurgical Sector – D.M., Z.M., and Others v. the State of Georgia

Moulds and Metals Georgia LLC” is a business entity registered in Georgia, operating in the metal processing and metallurgical sector

Key Characteristics of the Company

  • Established in 2011
  • Field of Activity: Production, processing, and sale of metal castings
  • Represents a medium-to-large industrial enterprise in the metallurgical sector
  • Located in the Poti Industrial Zone
  • Has both a local and international partnership structure

The company is also known for its participation in export-import operations and is one of the active players in Georgia’s metallurgical production sector.

According to existing public records, its ownership consists of both Georgian partners and foreign investors, and it has been recorded as an active business entity in the metallurgical industry for years

Brief Summary of the Case and Key Facts

In the present criminal case, the prosecution charges the defendants with committing particularly serious financial crimes, including embezzlement and accounting/corporate manipulations within the scope of Moulds and Metals Georgia LLC’s operations

According to the prosecution, an alleged fictitious scheme was in place, through which goods were supplied at prices higher than market value, resulting in financial losses for the company.

However, the case materials, the position of the defense, and the civil judgments already reviewed by the court present a fundamentally different picture.

 

Significant Court Judgment in the Civil Case

By the judgment of the Poti City Court dated May 30, 2024 (Case №2/394-23), it was established that

  • The actual damage to the company was caused by the actions of the Turkish partners
  • They were ordered to pay damages in the amount equivalent to 9,876,452 USD;
  • They were expelled from the company;
  • The court partially granted the lawsuit of the Georgian side.

This decision significantly alters the overall legal context of the case and raises questions regarding the objectivity of the prosecution’s direction

 

Defense Position and Critical Circumstances

According to the defense’s assessment:

  • The prosecution is not oriented toward establishing the objective truth
  • The liability of the Turkish partners has not been investigated, despite numerous requests
  • No objective analysis of market prices has been presented in the case
  • The primary basis of the prosecution relies on the statements of interested parties

Audit and Financial Findings

According to the audit assessment presented by the defense:

  • The company was profitable only in certain years (2017, 2021);
  • During the remaining periods, a significant loss of 29,290,066 GEL was recorded
  • The company has significant credit obligations toward its partners;
  • These circumstances preclude the logic of embezzlement as formulated by the prosecution.

 

The Issue of the Legality of Investigative Actions

According to the materials presented in the case

  • Large-scale searches were conducted at various companies;
  • Information regarding facts of psychological pressure and coercion of witnesses has been recorded;
  • There are statements indicating that testimonies were obtained under improper conditions
  • Some of the witnesses point to pre-prepared texts

The Special Investigative Service is conducting a relevant investigation into the aforementioned facts.

Legal actions carried out by the defense

In the given case, the defense has implemented a complex legal strategy, which includes both litigation and the activation of mechanisms for monitoring the actions of the law enforcement system.

  1. Successful civil litigations

With the participation of the defense and based on its legal position, in disputes related to the company

  • Two civil cases were won, concerning partner relations and corporate liability;
  • The courts shared the arguments of the defense and ruled that the prosecution’s position was not fully substantiated;
  • These decisions substantially change the legal landscape of the distribution of liability within the company

 

  1. Initiating an independent investigation

At the initiative of the defense:

  • An independent investigation has been launched into the facts of potential criminal actions by law enforcement officers;
  • The investigation pertains to issues of alleged unlawful pressure, coercion of testimony, and violations of procedural rights
  • The mentioned process is being conducted with the involvement of special investigative mechanisms.

 

  1. Criminal Case Management

The defense is actively involved in the ongoing criminal case, within the framework of which:

  • At this stage, the defendants are released on bail and are not in custody;
  • The pre-trial stage is underway, where the defense argues that there is no high probability of a conviction;
  • The insufficiency of evidence and procedural violations are emphasized

 

Overall Assessment

The activities of the defense in this case are characterized as:

  • A multi-faceted legal strategy
  • Exercise of active legal defense
  • Identifying and responding to potential procedural violations by the state
  • Ensuring the protection of the defendants’ rights at all instances

 

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