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MONEY LAUNDERING, OFFSHORE TRANSACTIONS: NAIRIT'S RUBBER MONEY FLOWS INTO THE POCKETS OF RUSSIAN AND ARMENIAN OFFICIALS
http://hetq.am/eng/news/25140/money-laundering-offshore-transactions-nairit%E2%80%99s-rubber-money-flows-into-the-pockets-of-russian-and-armenian-officials.html
20:26, April 4, 2013
Kristine Aghalaryan
Edik Baghdasaryan
Nairit isn't able to pay wages to its workers because the plant's
former director, Vahan Melkonyan, along with Minister of Energy and
Natural Resources Armen Movsisyan, entered into an arrangement whereby
they would obtain the rubber produced at cheap prices and then resell
at double or triple the price. Over the years, InterCaoutchouc (UK),
the offshore company set-up by Vahan Melkonyan, obtained 10,000 tons
of rubber in this manner. Melkonyan obtained the product at $2,400
a ton and then resold at $4,100-$7,800. He's thus racked up a tidy
profit of at least $25 million. Only Melkonyan knows how much went
to line the pockets of various Russian and Armenian officials. As to
how the payments were made, in cash or to their offshore accounts,
remains unanswered as well.
Officials not only pocketed the loans received to get Nairit back
up and running, but they went out of their way to prevent it from
operating. The rubber produced by Nairit was in great demand in
Russia, the former Soviet-bloc countries and the United States. Now,
a well-known German company has captured the market. Perhaps this
was the ultimate goal of Armenian officials? There is no government
that hands over the market for the sale of one of its products to
some other company.
How was the rubber sold?
Vahan Melkonyan, the former director of Nairit Plant and the current
representative Interstate Bank in Armenia, refused to answer Hetq's
questions. During a telephone interview we said that the questions
not only concerned Nairit but those offshore corporations registered
in his name. Mr. Melkonyan said it was impossible for us to have any
such information concerning him and confidently stated, "I have no
offshore registered companies." Before examining those companies,
here's an excerpt regarding how Nairit went bankrupt.
>>From 2005 until February 2007, InterCaoutchouc (UK) had been granted
exclusive rights for the sale of Nairit Plant rubber. In other words,
InterCaoutchouc served as a middleman. Nairit was prohibited from
selling its product directly to another company. Karen Israyelyan,
who served as Nairit Plant director at the time, sold 10,000 tons
of rubber to InterCaoutchouc at $2,400 a ton ($24 million). What's
interesting is that these transactions do not appear in the financial
books of InterCaoutchouc. This means that the sale of rubber was
transacted through other companies.
After the sale of the plant, from 2007 onwards, Nairit rubber was
sold by Rhinoville Property Ltd. (90% shareholder) via two companies
operating in Russia - Rhinoville Ltd and Nairit Ltd.
Documents in our possession show that InterCaoutchouc, and later on
Rhinoville Property Limited, resold Nairit rubber at very high prices.
Russia's "Vimpel" company, the "Chapaev Production Facility" in
the Russian town of Cheboksary, and Russia's Orenburg "ORT" CJSC,
purchased rubber at the following prices.
"Vimpel"
"Chapaev Production Facility"
"ORT" CJSC
Price(rubles)
Price(US $)
Price(rubles)
Price (US$)
Price(rubles)
Price (US$)
2006
111000
4100
110000
4100
110000
4100
2007
130000
4500
130000
4500
130000
4500
2008
188800
7800
188800
7800
188800
7800
2009
180000
6000
188000
7800
188000
7800
(U.S. $ amounts according to foreign exchange rates at the time
of transaction)
"I told the minister that I could sell at better rates. I entered into
an agreement and received the money. I wanted to organize the delivery
but the minister telephoned and told me not to deliver. I said we
would assume heavy losses, but he told me that wasn't my concern. A
week later they sold the plant to Rhinoville," recounts former Nairit
director Karen Israyelyan. He was subsequently dismissed from his job.
Vahan Melkonyan's offshore company
There are numerous offshore companies involved in the sale of Nairit
Plant and its history of loans. These companies, in turn, are owned
by other offshore companies, and so on in a never ending chain.
Naturally, such a scheme was meant to cover up all traces of criminal
activity.
InterCaoutchouc, registered in Wales, was one such company. Our
colleagues abroad assisted us in obtaining information about the
company. InterCaoutchouc was established in February 2005 and was
dissolved in February 2011. The company's shareholders were:
Charrydale Limited - 40%
Lankwood Finance Limited - 10%
Egler Corporation - 50 %
Charrydale Limited is registered in the British Virgin Islands. The
sole shareholder is Vahan Melkonyan, former Nairit Plant director
and currently Interstate Bank's representative in Armenia
Lankwood Finance Limited is also registered in the Virgin Islands
and Vahan Melkonyan is the sole shareholder.
Egler Corporation is registered in Belize. We haven't yet found out
who the shareholders are. Mr.S. Kulikov, former president of Interstate
Bank, is a likely candidate
According to company registry data, Vahan Melkonyan's Charrydale
Limited owns 120 shares. Melkonyan's Lankwood Finance Limited owns
30 shares. Egler Corporation owns 150 shares.
Later, Vahan Melkonyan seems not to have shared something with Egler
Corporation. Melkonyan's two companies became entangled in a court
case with Egler over disagreements regarding the distribution and
management of shares they owned in InterCaoutchouc. We deduce this
from the verdict handed down by Jules Sher QC hat we obtained from
the High Court of Justice, Chancery Division:
InterCaoutchouc has had a number of directors, including former
Interstate Bank employee Tatanya Serbkova. She served as director
from February 18, 2005 until September 21, 2007. She was replaced by
Aleksandr Yegelski. Sergey Sklyarov was appointed director on June 18,
2008. Ashot Pashinyan was director in 2009.
We were able to get in touch with a former employee of
InterCaoutchouc. He informed Hetq that Vahan Melkonyan managed the
company's accounts. The employee confirmed that S. Kulikov owned
shares in InterCaoutchouc. He didn't rule out the possibility that
former Interstate Bank president Anatoly Turkadze also benefited from
these transactions. According to the same source, not only Armenian but
top Russian officials as well benefitted from the Nairit transactions.
The participation of former Interstate Bank deputy director Sergey
Kulikov in the matter is clear since his wife, Anna Barisovna
Kulikova, was also a director of InterCaoutchouc. This fact is noted
in a document. In 2006, InterCaoutchouc made a payment to Russia's
pension fund. The payment was made in the name of Anna Kulikova,
listed as the company's director.
"Accidental" Coincidence
It turns out that Vahan Melkonyan is an expert in offshore companies.
Furthermore, he and his two sons formed "M-V-M Consulting Company",
a firm providing legal advisory services. The chief director is Samson
Melkonyan, Vahan Melkonyan's eldest son. The company is well versed
in providing clients with professional advice in setting up offshore
companies. Their website even offers a special section on the matter.
When obtaining information regarding the offshore companies that
have played a role in the Nairit loan story, several coincidences
are strikingly apparent. There is no doubt that all the companies are
closely linked and that, given such a scenario, Nairit's going bankrupt
was no accident. For example, a company called Cls Secretaries Ltd. was
carrying out the secretarial duties for InterCaoutchouc and was doing
the same for Drayton Finance Limited and Latheron Properties Limited;
two companies which own shares in Rhinoville Property Limited.
The addresses where InterCaoutchouc and Latheron Properties Limited
are registered are the same.
And here's another interesting coincidence. The registration address
of G.S.L. Law & Consulting (UK) Limited, the company who handled the
registry of these companies and all the transaction paperwork, is the
same as that of Rhinoville Property Limited. G.S.L. Law & Consulting
(UK) Limited-has branches in Russia, Cyprus, the Netherlands and the
Virgin Islands. Documents we possess reveal that the registration,
their subsequent sale, and other issues, were handled by the Russian
branch. Vahan Melkonyan has very close ties with Moscow and he makes
frequent visits to Russia.
Finally, there is an important fact appearing in the 2010 financial
statement of Rhinoville Property Limited. It clearly exposes the
connection of Rhinoville Property Limited (who own 90% of Nairit
Plant shares), the other offshore companies, and Vahan Melkonyan in
all of this.
According to the 2010 financial statement of Rhinoville Property
Limited, $8.8 million was "written off". The written off amounts
belonged to two companies of Vahan Melkonyan, and another to Ashot
Pashinyan. ($19,000 was written off to a third company).
Charrydale Limited - more than $8 million
Lankwood Finance Limited - $600,000
Ashot Pashinyan - more than $30,000
The statement shows that that Rhinoville Property Limited gave the
above amount as a loan to these companies and Ashot Pashinyan. Since
the payback deadline had already expired, Rhinoville Property Limited
had given up hope of ever getting paid back. Thus, it decided to
"donate" the amounts to the above-mentioned companies and individual,
thus writing off the amounts in its books.
As we've already mentioned, Ashot Pashinyan served as InterCaoutchouc's
director as of November 2009, the period when InterCaoutchouc wasn't
acting as the seller of Nairit rubber but continued to legally exists
and make transactions.
What we end up is a troubling reality. $170 million is squandered and
stolen in Armenia, a country in the midst of a deep economic crisis and
where 35% of the population officially lives in poverty. The regime
brandishes a sword in its declared fight against corruption in one
hand, while the other hand is busy stealing and squandering from the
people. It goes without saying that the RA government, particularly
the Ministry of Energy and Natural Resources which owns 10% of Nairit,
is responsible. The government knew about the tens of offshore and
Russian companies that Nairit set up and the transactions carried
out. Vahan Melkonyan, Interstate Bank's representative in Armenia,
and Nairit director at the time of the loans, can present a detailed
picture of how this tangled financial puzzle siphoned off all those
millions. RA Prime Minister Tigran Sargsyan is also full aware of
what happened since the sale and loan transactions occurred under
his watch. Adding insult to injury, Ashot Sargsyan, one of the Nairit
Plant deputy directors, is the PM's brother,
It's hard to predict if any of these officials will ever be called to
account. But neither can these same officials pretend not to notice
the facts staring them in the face.
Photo: Armen Movsisyan, Vahan Melkonyan, Prime Minister Tigran Sargsyan
This investigation is a collaboration between Investigative Journalists
of Armenia and the International Consortium of Investigative
Journalists. Based in Washington DC, ICIJ is an independent network
of reporters who work together on cross-borders investigations.
From: Emil Lazarian | Ararat NewsPress
http://hetq.am/eng/news/25140/money-laundering-offshore-transactions-nairit%E2%80%99s-rubber-money-flows-into-the-pockets-of-russian-and-armenian-officials.html
20:26, April 4, 2013
Kristine Aghalaryan
Edik Baghdasaryan
Nairit isn't able to pay wages to its workers because the plant's
former director, Vahan Melkonyan, along with Minister of Energy and
Natural Resources Armen Movsisyan, entered into an arrangement whereby
they would obtain the rubber produced at cheap prices and then resell
at double or triple the price. Over the years, InterCaoutchouc (UK),
the offshore company set-up by Vahan Melkonyan, obtained 10,000 tons
of rubber in this manner. Melkonyan obtained the product at $2,400
a ton and then resold at $4,100-$7,800. He's thus racked up a tidy
profit of at least $25 million. Only Melkonyan knows how much went
to line the pockets of various Russian and Armenian officials. As to
how the payments were made, in cash or to their offshore accounts,
remains unanswered as well.
Officials not only pocketed the loans received to get Nairit back
up and running, but they went out of their way to prevent it from
operating. The rubber produced by Nairit was in great demand in
Russia, the former Soviet-bloc countries and the United States. Now,
a well-known German company has captured the market. Perhaps this
was the ultimate goal of Armenian officials? There is no government
that hands over the market for the sale of one of its products to
some other company.
How was the rubber sold?
Vahan Melkonyan, the former director of Nairit Plant and the current
representative Interstate Bank in Armenia, refused to answer Hetq's
questions. During a telephone interview we said that the questions
not only concerned Nairit but those offshore corporations registered
in his name. Mr. Melkonyan said it was impossible for us to have any
such information concerning him and confidently stated, "I have no
offshore registered companies." Before examining those companies,
here's an excerpt regarding how Nairit went bankrupt.
>>From 2005 until February 2007, InterCaoutchouc (UK) had been granted
exclusive rights for the sale of Nairit Plant rubber. In other words,
InterCaoutchouc served as a middleman. Nairit was prohibited from
selling its product directly to another company. Karen Israyelyan,
who served as Nairit Plant director at the time, sold 10,000 tons
of rubber to InterCaoutchouc at $2,400 a ton ($24 million). What's
interesting is that these transactions do not appear in the financial
books of InterCaoutchouc. This means that the sale of rubber was
transacted through other companies.
After the sale of the plant, from 2007 onwards, Nairit rubber was
sold by Rhinoville Property Ltd. (90% shareholder) via two companies
operating in Russia - Rhinoville Ltd and Nairit Ltd.
Documents in our possession show that InterCaoutchouc, and later on
Rhinoville Property Limited, resold Nairit rubber at very high prices.
Russia's "Vimpel" company, the "Chapaev Production Facility" in
the Russian town of Cheboksary, and Russia's Orenburg "ORT" CJSC,
purchased rubber at the following prices.
"Vimpel"
"Chapaev Production Facility"
"ORT" CJSC
Price(rubles)
Price(US $)
Price(rubles)
Price (US$)
Price(rubles)
Price (US$)
2006
111000
4100
110000
4100
110000
4100
2007
130000
4500
130000
4500
130000
4500
2008
188800
7800
188800
7800
188800
7800
2009
180000
6000
188000
7800
188000
7800
(U.S. $ amounts according to foreign exchange rates at the time
of transaction)
"I told the minister that I could sell at better rates. I entered into
an agreement and received the money. I wanted to organize the delivery
but the minister telephoned and told me not to deliver. I said we
would assume heavy losses, but he told me that wasn't my concern. A
week later they sold the plant to Rhinoville," recounts former Nairit
director Karen Israyelyan. He was subsequently dismissed from his job.
Vahan Melkonyan's offshore company
There are numerous offshore companies involved in the sale of Nairit
Plant and its history of loans. These companies, in turn, are owned
by other offshore companies, and so on in a never ending chain.
Naturally, such a scheme was meant to cover up all traces of criminal
activity.
InterCaoutchouc, registered in Wales, was one such company. Our
colleagues abroad assisted us in obtaining information about the
company. InterCaoutchouc was established in February 2005 and was
dissolved in February 2011. The company's shareholders were:
Charrydale Limited - 40%
Lankwood Finance Limited - 10%
Egler Corporation - 50 %
Charrydale Limited is registered in the British Virgin Islands. The
sole shareholder is Vahan Melkonyan, former Nairit Plant director
and currently Interstate Bank's representative in Armenia
Lankwood Finance Limited is also registered in the Virgin Islands
and Vahan Melkonyan is the sole shareholder.
Egler Corporation is registered in Belize. We haven't yet found out
who the shareholders are. Mr.S. Kulikov, former president of Interstate
Bank, is a likely candidate
According to company registry data, Vahan Melkonyan's Charrydale
Limited owns 120 shares. Melkonyan's Lankwood Finance Limited owns
30 shares. Egler Corporation owns 150 shares.
Later, Vahan Melkonyan seems not to have shared something with Egler
Corporation. Melkonyan's two companies became entangled in a court
case with Egler over disagreements regarding the distribution and
management of shares they owned in InterCaoutchouc. We deduce this
from the verdict handed down by Jules Sher QC hat we obtained from
the High Court of Justice, Chancery Division:
InterCaoutchouc has had a number of directors, including former
Interstate Bank employee Tatanya Serbkova. She served as director
from February 18, 2005 until September 21, 2007. She was replaced by
Aleksandr Yegelski. Sergey Sklyarov was appointed director on June 18,
2008. Ashot Pashinyan was director in 2009.
We were able to get in touch with a former employee of
InterCaoutchouc. He informed Hetq that Vahan Melkonyan managed the
company's accounts. The employee confirmed that S. Kulikov owned
shares in InterCaoutchouc. He didn't rule out the possibility that
former Interstate Bank president Anatoly Turkadze also benefited from
these transactions. According to the same source, not only Armenian but
top Russian officials as well benefitted from the Nairit transactions.
The participation of former Interstate Bank deputy director Sergey
Kulikov in the matter is clear since his wife, Anna Barisovna
Kulikova, was also a director of InterCaoutchouc. This fact is noted
in a document. In 2006, InterCaoutchouc made a payment to Russia's
pension fund. The payment was made in the name of Anna Kulikova,
listed as the company's director.
"Accidental" Coincidence
It turns out that Vahan Melkonyan is an expert in offshore companies.
Furthermore, he and his two sons formed "M-V-M Consulting Company",
a firm providing legal advisory services. The chief director is Samson
Melkonyan, Vahan Melkonyan's eldest son. The company is well versed
in providing clients with professional advice in setting up offshore
companies. Their website even offers a special section on the matter.
When obtaining information regarding the offshore companies that
have played a role in the Nairit loan story, several coincidences
are strikingly apparent. There is no doubt that all the companies are
closely linked and that, given such a scenario, Nairit's going bankrupt
was no accident. For example, a company called Cls Secretaries Ltd. was
carrying out the secretarial duties for InterCaoutchouc and was doing
the same for Drayton Finance Limited and Latheron Properties Limited;
two companies which own shares in Rhinoville Property Limited.
The addresses where InterCaoutchouc and Latheron Properties Limited
are registered are the same.
And here's another interesting coincidence. The registration address
of G.S.L. Law & Consulting (UK) Limited, the company who handled the
registry of these companies and all the transaction paperwork, is the
same as that of Rhinoville Property Limited. G.S.L. Law & Consulting
(UK) Limited-has branches in Russia, Cyprus, the Netherlands and the
Virgin Islands. Documents we possess reveal that the registration,
their subsequent sale, and other issues, were handled by the Russian
branch. Vahan Melkonyan has very close ties with Moscow and he makes
frequent visits to Russia.
Finally, there is an important fact appearing in the 2010 financial
statement of Rhinoville Property Limited. It clearly exposes the
connection of Rhinoville Property Limited (who own 90% of Nairit
Plant shares), the other offshore companies, and Vahan Melkonyan in
all of this.
According to the 2010 financial statement of Rhinoville Property
Limited, $8.8 million was "written off". The written off amounts
belonged to two companies of Vahan Melkonyan, and another to Ashot
Pashinyan. ($19,000 was written off to a third company).
Charrydale Limited - more than $8 million
Lankwood Finance Limited - $600,000
Ashot Pashinyan - more than $30,000
The statement shows that that Rhinoville Property Limited gave the
above amount as a loan to these companies and Ashot Pashinyan. Since
the payback deadline had already expired, Rhinoville Property Limited
had given up hope of ever getting paid back. Thus, it decided to
"donate" the amounts to the above-mentioned companies and individual,
thus writing off the amounts in its books.
As we've already mentioned, Ashot Pashinyan served as InterCaoutchouc's
director as of November 2009, the period when InterCaoutchouc wasn't
acting as the seller of Nairit rubber but continued to legally exists
and make transactions.
What we end up is a troubling reality. $170 million is squandered and
stolen in Armenia, a country in the midst of a deep economic crisis and
where 35% of the population officially lives in poverty. The regime
brandishes a sword in its declared fight against corruption in one
hand, while the other hand is busy stealing and squandering from the
people. It goes without saying that the RA government, particularly
the Ministry of Energy and Natural Resources which owns 10% of Nairit,
is responsible. The government knew about the tens of offshore and
Russian companies that Nairit set up and the transactions carried
out. Vahan Melkonyan, Interstate Bank's representative in Armenia,
and Nairit director at the time of the loans, can present a detailed
picture of how this tangled financial puzzle siphoned off all those
millions. RA Prime Minister Tigran Sargsyan is also full aware of
what happened since the sale and loan transactions occurred under
his watch. Adding insult to injury, Ashot Sargsyan, one of the Nairit
Plant deputy directors, is the PM's brother,
It's hard to predict if any of these officials will ever be called to
account. But neither can these same officials pretend not to notice
the facts staring them in the face.
Photo: Armen Movsisyan, Vahan Melkonyan, Prime Minister Tigran Sargsyan
This investigation is a collaboration between Investigative Journalists
of Armenia and the International Consortium of Investigative
Journalists. Based in Washington DC, ICIJ is an independent network
of reporters who work together on cross-borders investigations.
From: Emil Lazarian | Ararat NewsPress