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)