Under Serzh Sargsyan, a state company was sold below its appraised value — prosecutors uncover violations

The Military Prosecutor's Office of Armenia has sent the Anti-Corruption Committee a report on a crime related to the illegal alienation of state property during the period when the Ministry of Defense was headed by former President Serzh Sargsyan.

Criminal proceedings have already been initiated over the violations that were uncovered, and a lawsuit to protect state interests has been accepted by the court.

At the center of the investigation is a transaction involving the Yerevan Market No. 7 LLC, on whose territory the MEGAMALL shopping center is located today. In 2003, 100% of the shares of ARKROS LLC, which owned this market (acquired in 1999 for 282.45 million drams), were transferred to the ownership of the Republic of Armenia and placed on the balance sheet of the Ministry of Defense.

However, just a few months later, the state property was alienated at an undervalued price. Based on a report by Defense Minister Serzh Sargsyan, and without the appraisal required by law, on June 10, 2004, the government authorized the sale of ARKROS LLC to a private individual through a direct sale for just 303 thousand U.S. dollars (about 160.56 million drams).

At the same time, seven months before the transaction, the company was officially valued at 306.34 million drams, which the participants in the discussions were aware of. Moreover, the Minister of Finance and Economy proposed putting the property up for open auction, but Serzh Sargsyan and the government ignored these warnings. As a result, on July 14, 2004, the assets were sold for 145.78 million drams less than their actual appraised value, causing major damage to the state.

Source: Bagramyan 26