(Reuters) – TBC Bank Group Plc <TBCG.L> said on Wednesday that its unit was being investigated by the National Bank of Georgia (NBG) and the country’s office of public prosecution, relating to certain transactions that took place in 2007 and 2008.
The investigation alleges that certain transactions between TBC Bank’s unit, TBC Bank JSC, in Georgia and some entities were illegal, the group said.
The country’s central bank believes that these entities were related to the chairman and deputy chairman of TBC Bank Group, the company said, and the investigation alleges that these transactions were not in compliance with a Georgian law on the regulation of conflicts of interest.
A company spokesman identified current chairman and deputy chairman as Mamuka Khazaradze and Badri Japaridze, respectively, as the executives that NBG cited in its allegations.
The unit said it refutes the allegations relating to these historic transactions, which took place before the company’s listing in 2014.
The transactions under question were already the subject of an inspection by the country’s central bank in 2008, but did not result in any action being taken at the time, TBC said.
NBG imposed a fine of about 1 million Georgian lari (£294,315), TBC said, adding that it was unclear whether NBG will seek additional sanctions.
TBC said it has challenged the fine in the country’s courts and has been issued an injunction suspending the payment. It does not expect the investigation to result in any charges.
TBC, Georgia’s largest retail bank, reported a 23.7 percent jump in quarterly profit in November, as it grew its loan book on the back of strong economic growth in the country.
TBC Bank shares were little changed at 1484 pence at 0934 GMT.
(Reporting by Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta, Bernard Orr)