Georgian arms co sues Roni Milo for millions

Roni Milo
Roni Milo

The Georgian company has been involved in litigation against the former Tel Aviv Mayor for two and a half years.

"Roni Milo smuggled assets to his close family members in a fictitious and illegitimate manner, for appearances sake," alleges Georgian weapons company George Shanidze, which has been in a prolonged dispute with the former government minister and former Tel Aviv mayor. The dispute involves defense deals in Georgia. George Shanidze has filed a new NIS 10 million lawsuit against former Tel Aviv Mayor Roni Milo in the Tel Aviv District Court.

The Georgian company, controlled by businessperson David Adilshvili, has been asserting for a number of years that Milo owes it money from sensitive defense deals worth millions of shekels between defense industries in Israel and the Georgian government, in which companies through which Milo operates and George Shanidze were intermediaries. The parties were in mediation with former Prime Minister Ehud Olmert for several months, but the dispute was not solved.

Shanidze is now alleging that assets worth millions of shekels were smuggled as part of an attempt by Milo "to thwart, or at least to significantly retard, implementation of a future judgment against him and companies under his ownership" while an earlier claim filed against Milo by the company demanding details of accounts is being heard.

In the new lawsuit, filed through Adv. Ilan Sofer, Adv. Guy Wilf, and Adv. Yaara Haimi from the Ilan Sofer & Co. law firm, the Georgian company claims that Milo "committed fraud, deception, and concealment of information, while violating the consensual relationship and relations of trust between the parties and committing wrongs and unjust enrichment."

As part of the lawsuit filed against Milo, the companies through which he conducts his business, his daughter Efrat, and Rafi Eloshvili, Milo's partner in defense deals in Georgia, George Shanidze states, "Milo and his partner defrauded George Shanidze in every possible way, concealed tens of millions of shekels received from Elbit Systems and Rafael Advanced Weapons Systems from it, and did not give George Shanidze its rightful 33.3% share. Milo and Eloshvili instead divided this money equally between them and pocketed it."

George Shanidze alleges that Eloshvili in effect admitted that he had defrauded it, together with Milo. The statement of claim says, "Eloshvili and companies under his ownership filed a NIS 9.4 million lawsuit against Roni Milo and companies under his ownership, in which they for all intents and purposes legally admitted that they had jointly defrauded George Shanidze in a number of deals, and had divided the money from these deals equally between them. Eloshvili and his companies also alleged, however, that Milo and the companies under his control had also cheated them in some of the deals through agreements and payments that had also been concealed from Eloshvili and his companies, and had certainly been concealed from George Shanidze."

The earlier dispute between the parties, in which Milo was required to provide a list of his accounts involved in the deal, was heard in court over two and a half years. A few days before Milo and Eloshvili were to have been cross-examined about their statements, Milo asked the court that the claim against him be accepted in full, in what George Shanidze asserts constitutes a "more irregular" action.

"It isn't every day that a respondent asks that the claim against him be accepted in full and a judgment be made against him, merely in order to avoid cross-examination of him and a witness on his behalf. The motives of Mr. Milo and Mr. Eloshvili are known only to them," the new lawsuit filed by George Shanidze states.

The judgment, rendered in June 2019 with Milo's consent, stated that he must deliver to a neutral accounting firm (EY) the list of accounts of the companies through which he operated, "concerning the full proceeds received as a result of promoting deals in Georgia." According to the June 2019 judgment, Milo will disclose "every account, document, receipt, catalogue, report, output, and any other relevant document concern the proceeds received by the company through which Milo operated in respect of these deals."

The Georgian company alleges that Milo "trampled" the previous judgment rendered in the claim that stipulated disclosure of accounts kept for two and a half years between the parties. "Very few litigants, if any, will dare, or even consider, violating a judgment in such a gross manner. The Milo company and Roni Milo are such litigants. It is regrettable that a person who was previously a minister of police behaved in such an embarrassing way," George Shanidze states in its claim.

George Shanidze alleges that Milo violated the judgment through "crudely and irregularly obstruction of implementation of the judgment in an extreme fashion" by him and the companies under his control.

"The verdict states that the Milo company must disclose everything. The verdict also stipulates that the Milo company must disclose these documents "within 60 days of the date of the judgment," the claims asserts. George Shanidze alleges, however, "Although these matters are clear, and more than six months have passed since the date of the judgment, the Milo company is violating the judgement, and is not cooperating with the accountant."

George Shanidze alleges that after Milo procrastinated and refrained several times from disclosing the information, except for a limited number of documents, EY contacted him with a demand for documents, but he also failed to comply with this demand. "In the end, the accountants had to send the Milo company a letter making it clear that the judgment was being violated, and that they were not getting the necessary cooperation, because there was no justification - certainly not according to the wording of the judgment - for making various burdensome and difficult demands, because they were unable to perform their work, and that insofar as they do not disclose the necessary documents as soon as possible, they would have to resign their positions," the claim states.

Adv. Ram Caspi, Milo's legal representative, said in response, "As is usually in Israel, Roni Milo's response to the lawsuit will be filed at the authorized court."

Adv. Ram Jeanne from the AYR law firm, who represents Rafi Eloshvili, said in response, "The attempt to involve Mr. Eloshvili in the legal dispute between George Shanidze and Roni Milo is groundless. This will be made clear in court."

Published by Globes, Israel business news - - on January 22, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

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