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Armenian official says energy provider to account for share manageme

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  • Armenian official says energy provider to account for share manageme

    Armenian official says energy provider to account for share management deal

    Ayots Ashkar, Yerevan
    4 Aug 05

    The Public Service Coordinating Commission [PSCC] in its letter
    directed to the Director General of the Armenian energy networks
    Yevgeniy Gladunchik has issued a final and resolute demand that all
    the necessary documents substantiating the need for the management of
    Armenian Energy Distributing Networks [AEDN] being committed from
    Midland Resources Holding to Interenergo's trust management are
    submitted within the next 15 days.

    [Ayots Ashkar correspondent] What was the reason of such a resolute
    demand?

    [Robert Nazaryan, chairman of Public Service Coordinating
    Commission] We needed reliable information to start more resolute
    actions. Regrettably, this deal between Interenergo and Midland
    Resources was a surprise to us. First we learned about the deal
    from the press, then from RAO UES [United Energy System of Russia]
    website and began to investigate. We sought explanations from the
    head of the Midland Resources Alex Shnider and he replied that the
    company did not give up the shares of the AEDN. At the same time he
    said that the company was not keen to invest in the energy sphere.

    The management of the AEDN was committed to a trust for making
    investments and passing profits to Interenergo. Such a reply actually
    raised a number of questions, because although even if this does not
    mean selling of shares, if Midland Resources passes the profits from
    the AEDN operations to another company, it still means something like
    a sale actually took place.

    The biggest problem is that Midland Resources insists it still owns 100
    per cent of the AEDN shares, they just gave the right to Interenergo
    to make investments and collect profits.

    [Correspondent] Should the Midland Resources gain the PSCC's agreement
    for making contract for the trust management?

    [Nazaryan] In this case one may understand "trust management" as
    committing AEDN to executive management or to management of shares. But
    we still do not have the contract under which the Midland Resources
    committed AEDN to the trust management of Interenergo. If we had this
    document we would see what is happening. At present I can say with
    reservation that they have broken the license conditions.

    In particular, if Midland Resources gave the right for getting profits
    to Interenergo, it should undoubtedly agree on this with the PSCC. On
    the other hand, if the second party in the deal fulfils the license
    activity in our energy market, it should also get our agreement. More
    over, at present we cannot assess the relations between RAO UES
    and Interenergo. What part of the shares belongs to RAO UES? We have
    information that only 40 per cent of Interenergo's shares belong to RAO
    UES. A question arises: who owns the other 60 per cent? We are giving
    15 days to Midland Resources to answer our questions. I think this time
    will be enough to submit the requested documents and to explain things.

    [Correspondent] We have an impression that if the World Bank did
    not pay attention to the problems of the deal between the Midland
    Resources and Interenergo, the PSCC would not touch them.

    [Nazaryan] I do not agree with this view. I think that the World
    Bank and USAID made the backhand statements in particular regarding
    the Armenian government and our PSCC. Actually, after getting the
    news about the deal we did everything possible to get out from the
    situation that emerged. I think in this situation the PSCC took the
    balanced and correct steps.

    From: Emil Lazarian | Ararat NewsPress
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