A representative of billionaire and opposition leader Samvel Karapetian said on Friday that he will reject a government offer to give up ownership of Armenia national electric utility at a symbolic price.
Prime Minister Nikol Pashinian called for the nationalization of the Electric Networks of Armenia (ENA) operator last June just hours after Karapetian was arrested on charges stemming from his strong criticism of Pashinian’s crackdown on the Armenian Apostolic Church.
Karapetian was also charged with tax evasion, fraud and money laundering following his subsequent decision to set up his own political group. It is now expected to be the main opposition contender in Armenia’s June 7 parliamentary elections. The tycoon, who was moved to house arrest in late December, rejects all the accusations as politically motivated.
The government forcibly took over ENA’s management in July, accusing its parent company owned by Karapetian’s Moscow-based business conglomerate, Tashir Group, of mismanaging the power distribution network. Tashir rejected the accusations, appealing to the Arbitration Institute of the Stockholm Chamber of Commerce (SCC).
Armenia’s Public Services Regulatory Commission (PSRC) formally revoked Tashir’s operating license on November 17. The decision meant that ENA can be nationalized if the two sides fail to agree within the next three months on its sale to another investor.
In a formal proposal submitted to Tashir on February 17, the government valued the utility employing thousands of people at just 23.3 billion drams ($62 million). According to a copy of the proposal obtained by RFE/RL’s Armenian Service last week, payment of that sum is conditional on Karapetian and his family returning about 23.2 billion drams in dividends from ENA profits paid to them over the past decade. The proposed deal would leave the tycoon with a net gain of 142 million drams ($380,000).
“Of course, we will not accept the proposal,” said Davit Ghazinian, who managed ENA until its seizure by the government. “What rational or sensible person would accept that proposal? On the contrary, the person making that proposal should be sent to an appropriate [psychiatric] specialist.”
Under Armenian law, Tashir has three months to formally reply to the government proposal. Citing this provision, Armenia’s Administrative Court banned the government recently from nationalizing ENA before May 25.
The government will have to compensate Tashir even in the likely event of the nationalization which Karapetian’s group will almost certainly challenge in court. Tashir is already seeking $500 million in damages for what it calls an illegal “expropriation” of Karapetian’s biggest asset in Armenia.
The Stockholm arbitration body ordered the Armenian authorities last summer to refrain from seizing ENA, changing ENA’s top management or revoking Tashir’s operating license pending a verdict in the case. The authorities ignored the order.
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