Former Georgian Municipal Development Fund head arrested on abuse of power charges

The former Executive Director of the Municipal Development Fund of Georgia, Davit Tabidze, has been arrested on charges of abuse of power, the Investigation Service of the Ministry of Finance announced on Monday.

The body added two other officials, a programme manager and a project manager from the same institution, had previously been detained in connection with the case but were later released on bail after cooperating with investigators.

The agency said the arrests relate to an earlier investigation into the misappropriation of ₾9,365,801 ($3.44mln) in state funds and the laundering of an additional ₾1,211,000 ($445,316) intended for the rehabilitation of 30 kindergartens. The alleged scheme involved managers of the construction company Lagi Capital, who have also been detained.

Investigators have established that Tabidze and the other officials were aware that the company’s advance payment requests from July 2023 to May 2024 were only partially substantiated. Despite this, they allegedly continued to release additional advances, totalling ₾11,218,380 ($4.12mln), to Lagi Capital, even as previously issued funds had not been spent for their intended purpose. The company’s management is accused of fraudulently acquiring ₾9,365,801 of the total amount.

The case is being investigated under several articles of the Criminal Code of Georgia, including abuse of authority, fraud, money laundering and forgery, carrying a possible sentence of 9 to 12 years in prison.

The investigation remains ongoing as authorities work to identify additional participants in the scheme.