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All In the Family: Armenian Prime Minister's Booming Business Empire

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  • All In the Family: Armenian Prime Minister's Booming Business Empire

    All In the Family: Armenian Prime Minister's Booming Business Empire

    Grisha Balasanyan
    14:00, October 20, 2014


    Armenian Prime Minister Hovik Abrahamyan currently owns more than
    fifty businesses in Armenia, butnone are officially registered under
    his name.

    Abrahamyan owns them via proxies ` his family members. (He's married,
    has three children and seven grandchildren)

    This way he's not in violation of the Armenian Constitution
    prohibiting government officials from engaging in commercial
    enterprise while in office.

    During a May 15 cabinet session Abrahamyan declared that the
    government had adopted measures to create a level economic playing
    field for all and that all entrepreneurs must work on and equal
    footing.

    Prime Minister's Verbal Gaffe

    The prime minister then put his foot in his mouth by declaring: `And I
    want to say that I will start with myself, so that all understand the
    need for equality.' In essence, Abrahamyan stated that he too was a
    businessman who hadn't been playing fairly up till then.

    While the prime minister doesn't officially own any businesses, his
    financial disclosures, which all top officials must submit yearly,
    tell quite another story.

    For example, Hovik Abrahamyan's financial disclosure as of April 13,
    2014 (the day he became prime minister) shows 269 million AMD
    (US$656,642) and US$1.940 million in bank deposits. Revenues are
    listed as 4,110,330 AMD (the prime minister's yearly salary) and an
    additional 40 million AMD (US$97,642) as `other income'.

    No one can say what the sources of this `other income' are. The
    Commission on Ethics of High-Ranking Officials, the oversight body
    that receives such disclosures, sees fit not to ask.

    When you look at Abrahamyan's official bio, one seeks that the prime
    minister's last job in the private sector was way back in 1995 as the
    director of the Artashat Wine and Brandy Factory. He's been in public
    service, in various capacities, ever since.

    The question thus arises, how did Abrahamyan and his wife become millionaires?

    Hovik Abrahamyan's private house in Mkhchyan village

    On May 21 of this year, when the parliament was debating the
    government's economic reform package, MP Nikol Pashinyan directly
    asked Abrahamyan how he became so rich if he wasn't engaged in
    business.

    The prime minister responded that Pashinyan shouldn't take such a
    `negative stance' towards business, adding that: `As to my assets,
    I've never concealed the fact that I own things. I've revealed it all
    according to the letter of the law in detail. I worked in those years
    in the agricultural sector, back when it was permissible. During my
    various government posts, I never acquired any holdings and neither
    did I accrue them through corrupt practices.'

    Prime Minister's Missing Nine Years

    Abrahamyan's bio states that his first job from 1990 to 199 working as
    division head of the Burastan Brandy Factory. It also states that he
    graduated from the Yerevan Institute of National Economy, but no dates
    are given.

    If, as stated, the prime minister was born in 1958, entered the
    institute at the age of 18 and then spent five years studying there,
    we arrive at the year 1981. So what did Abrahamyan do in the
    interveningnine years before getting a job at Burastan?

    Prime Minister Abrahamyan first worked here

    In his native village of Mkhchyan, a senior resident told me that
    Abrahamyan worked as a laborer at an auto repair shop before Burastan.
    The old man even showed me the place which now belongs to Abrahamyan's
    family according to workers we talked to there.

    The Abrahamyans must have other income sources than agriculture

    The only proof that Abrahamyan is engaged in agriculture appears on
    his financial disclosure in the box marked `revenues'. Surprisingly,
    Abrahamyan shows no land holdingsin any of his disclosures.

    Nevertheless, every year he discloses income from the sale of
    agricultural goods. In 2011, when he was president of the National
    Assembly, Abrahamyan showed 40 million AMD in related income, 45
    million in 2012, and 40 million in 2013. His wife Julieta also
    receives similar amounts of income from the sale of agricultural
    goods.

    But the prime minister controls large tracts of land in Ararat
    Province. Just in the village of Narek, he maintains a 120 hectare
    parcel (100 grapevines and 20 hay fields) registered under his wife's
    name.

    Julieta Abrahamyan's land in Narek village

    Narek Mayor Garoush Hakobyan told me, `Argam has 120 hectares. If he
    didn't buy it, or I or someone else didn't, 70% of our lands would
    have remained up in the air.' {Argam is the prime minister's son}

    The Abrahamyan family also owns land in the villages of Kaghtsrashen,
    Ourtsadzor and Goravan. (None of the mayors wanted to speak to Hetq on
    the topic).

    Armenian Prime Minister Declares Level Playing Field¦But Wife's
    Businesses Appear Exempt

    The irrigation network in Narek and Kaghtsrashen are in bad shape and
    there's a scarcity of water. While the Abrahamyan family lands are
    irrigated by another network, they too are impacted by the water
    shortage.

    In 2013, the European Bank for Reconstruction and Development issued
    Armenia a 25 year US$30 million loan to improve the country's
    irrigation infrastructure. The Armenian government chipped in US$7.5
    million of its own towards the project. According to the project, the
    villages of Narek and Kaghtsrashen, along with Abrahamyan family
    lands, are to be guaranteed water from the River Azat on a gravity fed
    basis.

    The Abrahamyans: Annual Income from Sale of Agricultural Goods (in AMD)

    Income Derived from Sale of Agricultural Goods (AMD)

    N

    Name

    2011Õ©.

    2012Õ©.

    2013Õ©.

    1

    Hovik Abrahamyan

    40,000,000

    45,000,000

    40,000,000



    2

    Julieta Abrahamyan

    45,000,000

    48,000,000

    45,000,000



    As the numbers in the below chart clearly imply, the Mr. and Mrs.
    Abrahamyan do not only receive income from the sale of agricultural
    goods.

    Monetary Resources and Income

    N

    Name

    2009

    2010

    2011

    2012

    2013

    1

    Hovik Abrahamyan

    Monetary Resources

    ---

    310,000,000 AMD

    2,100,000 USD

    290.000.000

    AMD

    2,050,000 USD

    280,000,000

    AMD

    2,000,000 USA

    27,000,000

    AMD

    1,950,000 USA

    Income

    29,499,760

    AMD

    25,515,220

    AMD

    43,671,030

    AMD

    49,256,010

    AMD

    42,976,200

    AMD

    2

    Julieta Abrahamyan

    Monetary Resources



    ---

    315,000,000

    AMD

    3,020,000 USD

    300,000,000

    AMD

    2,900,000 USD

    302,000,000

    AMD

    2,900,000USD

    300,000,000

    AMD

    2,850,000USD

    Income

    ---

    ---

    45.000.000 AMD

    Only from sale of agricultural goods

    48.000.000

    AMD

    Only from sale of agricultural goods

    45.000.000

    AMD

    Only from sale of agricultural goods


    Businesses owned by Mr. and Mrs. Hovik Abrahamyan

    No commercial enterprise can be launched in Ararat Province without
    the participation of the Abrahamyan family. They have shares in many
    businesses and oversee the province's economy. Hovik Abrahamyan has
    brought his brother Henrik and Henrik's son Hovhannes into many of his
    businesses. No wonder then that Rafik (another brother of Hovik) and
    their father Argam have been elected to the Mkhchyan municipal
    Council. Arsen Abrahamyan, a nephew of the prime minister, now serves
    as the head of the Ararat Provincial Police. After being appointed the
    prime minister, Hovik Abrahamyan's son-in-law Vahan Mamikonyan was
    appointed the tax agency head in Shengavit (a district of Yerevan),
    while another son-in-law, Vladimir Tamrazyan was appointed head of the
    Zvartnots International Airport Customs Department

    Preserves, wine and cognac production

    Entrance to Artashat Vincon store and factoryRear View of the factory

    Artashat Vincon CJSC, located in Ararat Province, produces wine,
    cognac and other alcoholic beverages. 50% of the shares are owned by
    the prime minister's son Argam Abrahamyan and 50% by Hovhannes
    Abrahamyan (the son of the prime minister's brother Henrik).

    Between 2010 and 2011, the company took out a total of US$500,000 in
    loans from various banks. Hovik Abrahamyan, then president of
    Armenia's parliament, cosigned as guarantor on a few of them. In
    return, according to our sources, the company serves as guarantor for
    Hovik Abrahamyan, allowing him to take out bank loans.

    Vikom-Lab Ltd., also in alcoholic beverage production, was founded
    by Hovhannes Abrahamyan in 2012 with Armenian and Canadian partners.
    Hovhannes Abrahamyan and Steven Bryan Fera each owns 45% of shares.
    The remaining 10% belong to Laura Petrosyan.

    "ARTFOOD" Artashat Cannery is another business owned by Argam
    Abrahamyan. Vachagan Karapetyan, son of Armenian Minister of
    Agriculture Sergo Karapetyan, is a 50% shareholder. The general
    manager is Armen Lazarian.

    Artfood plant

    In October 2012 the company received a five year 300 million AMD loan
    from the Small and Medium Enterprises Investments Universal Credit
    Organization (`SME Investments' UCO), a government created credit
    agency. Argam Abrahamyan signed as the loan guarantor.

    Hetq sent an inquiry to SME Investments UCO executive Director Artur
    Badalyan about this loan. Badalyan refused to comment, arguing that he
    had no authority to respond under Armenian law.

    Gasoline and natural gas stations bring in big bucks for the prime
    minister's relatives

    Prime Minister's Son to Open Largest Shopping Center in Artashat

    The road from Artashat to Yeraskh is lined with gasoline and natural
    gas stations owned by relatives of the prime minister.

    Mai-Arg Ltd., owned equally by Argam Abrahamyan and Mkhchyan village
    resident Nara Melkonyan, has several fueling stations in the area.

    Trans Gaz Ltd., established this year, is another fueling station
    company partially owned by Argam Abrahamyan (30%). 25% is owned by
    Gagik Poghosyan (brother of Republican Party MP Karineh Poghosyan) and
    a relative of Hovik Abrahamyan on his maternal side.

    Hovik Abrahamyan's gas stations in Artashat

    Dalar Gaz Ltd., also established this year, was owned exclusively by
    Argam Abrahamyan until September 26 when 100% ownership reverted to
    Khachatur Hovsepyan, its director.

    The company is registered at the same address as Gagik Poghosyan.
    Doubtlessly, the change of owners was a formality and that Argam
    Abrahamyan remains the true owner.

    Of interest is that in 2013 Khachatur Hovsepyan founded a fuel
    importing company called Navt and Gas Ltd. (Hovsepyan owns 50% and
    Yerevan resident Roman Muradyan owns 50%)

    The company delivers fuel to stations throughout Yerevan and surrounding cities.

    Metzn Argami Ltd. was established in 2007 by Gagik Poghosyan. One year
    later he handed 100% of the shares to the prime minister's wife
    Julieta Abrahamyan.

    The company operates a number of gasoline stations and other shopping
    sites in Artashat and surrounding villages. One of the gas stations is
    located at the entrance to Mkhchyan village. The company's main
    business is the buying and selling of foodstuffs and non-food items.

    Arashag Ltd. operates gas stations along the Artashat-Yeraskh roadway.
    Gagik Poghosyan owns 40% of the shares. The company is also engaged in
    construction, automotive repair, and foodstuff and non-foodstuff
    trade.

    One of Hovan-Lian Group's natural gas filling stations

    Hovan-Lian Group Ltd. is also a prominent owner of natural gas
    stations. Henrik Abrahamyan and former MP Armen Pourdoyan own equal
    shares in the company, which is named after their children Hovan and
    Lian.

    Ard-Gaz Ltd., created in 2013, is a new natural gas station company
    servicing the village of Mkhchyan. Henrik Abrahamyan and fellow
    village resident Gayaneh Hovsepyan own 30% each, with Sousanna
    Khachatryan, a resident of Abovyan who also serves as company manager,
    owning the remaining 40%.

    (To be continued)


    http://hetq.am/eng/news/56953/all-in-the-family-armenian-prime-ministers-booming-business-empire.html

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