Global shame
Possibly Russia is letting the Armenian PM Tigran Sargsyan down in relation to the arbitration case “The Intergovernmental Bank vs. Rhinoville Property Limited” presided by judge A. Kamarov.
Transfer from Itera to Rosneft and Armen Movsisyan’s failue to “remeber” mportant facts
The respondent failed to show up this time, like the other two times. The first instance court of Abitration has started looking into this case. The next session is to take place in mid October. It is supposed that by that time it will be clear what compromises the Armenian government is ready to make toward selling Nairit factory CJSC to the Russian RosNeft oil company.
The primary interested party in acquiring Nairit was Itera, an oil and gas company. Last year the Itera examined the situation of the factory and possible projects for developing the company. Most of Itera’s share, 51%, used to belong to RosNeft. However, in May information was published about transfer of Itera to RosNeft through acquirng the shares of its director Igor Makarov and his partners, amounting to 3 billion dollars. By the way, RosNeft acquired the controlling share in Itera, one of the main competitors of the Russian giant gas company GazProm, in February 2012. At that time there was no information about the prospect of merging Itera to the giant oil company.
In April of this year a delegation headed by the president of RosNeft Igor Sechin was in Armenia. Among other issues discussed with the Armenian government was the possible acquisition of Nairit. According to our information, the Russian party is ready to pay 100 million dollars for the Armenian company.
Several days ago the minister of environment and natural resources Armen Movsisyan informed the 168 Zham that the Armenian government was still negotiating the issue of Nairit with RosNeft. The minister says Igor Sechin has suggested discussing the technological potential of production of Nairit first, and whether it is will feasible to buy the company. “These discussions are over; the environment is positive,” said A. Movsisyan.
In answer to question whether there are any disputable issues the minister said time would be necessary to finish the negotiation. Regarding the debt of the company the minister says he cannot say whether the debts would be a problem in the negotiation as they have not discussed it yet. According to the minister, the debt of Nairit company, including its debt to the Intergovernmental bank is around 100 million dollars.
It seems minister Armen Movsisyan, who has been in office for the past 12 years, is trying to cover up something. According to 168 Zham’s sources from Russia, there is nothing “positive” in this deal and negotiations over Nairit are not successful. The reason is the debt of the company, which is four times more than the amount the minister has published. In fact, the real amount of debt is 350-400 million dollars. Nairit owes 170 million dollars to the Intergovernmental Bank. Nairit also owes to the state budget of Armenia, its employees, various banks, and companies for electricity, water, etc.
The Intergovernmental bank is an institution established by central banks of five countries, with its majority share controlled by Russia. In 2006 the Intergovernmental bank opened a credit line for Nairit’s manager at that time Rhinoville Property Limited, a British company, and in 2009 issued another credit of 100 million dollars to Nairit. The State of the Republic of Armenia was the guarantor of the debt. The state has 10% share in the company. The credit has not been paid off so far. In fact, it turns out that minister A. Movsisyan does not “remember” the real amount of the debt as he did not “remember” the recent date of signing the agreement on gas price.
Why does the Intergovernmental Bank hurry?
It is two years that discussion is going on about closing the Intergovernmental Bank. To fill this gap, the Russian Eurasia Bank was established, which is designed to have the same role as the Intergovernmental Bank. Eurasia Bank was established by central banks of several countries, and the Armenian central bank has a small share in it. The elephant in the room is the fact that the Intergovernmental Bank cannot be closed unless it has not collected its money and brought the financial balance to zero. For this reason the primary goal is returning the money issued to Nairit. As an aid, Eurasia Bank agreed to provide 400 million dollars to Nairit for a recovering project. The money was provided 1-1.5 years ago, however with the condition that the Armenian state would be a guarantee.
Such guarantees are provided based on intergovernmental agreements to be ratified by the parliament. However, this project did not come true due to a risk that many other issues would come up and many secrets would be unlocked, including information about where the money taken so far has gone. The Armenian revolutionary Federation has even suggested launching an ad hoc in the parliament to look into the issue of Nairit company. Everyone in the government understands that they do not need a new scandal and the one with offshore businesses owned by high ranking officials was enough.
To note, Rhinoville company bought Nairit in 2006 at the price of 40 million dollars. At that time PM Tigran Sargsyan was the president of the Intergovernmental Bank’s board of directors, and the first credit was issued during the same year (70 million dollars). In ignorance of the public interests, the Prime-Minister issued a credit not to the state but to a private company. Even more, the money was given to a private company in Armenia owned by a British company, which was actually an “offshore balloon.” In fact, the company could continue being state property as the only thing Rhinoville was doing was accounting.
During the period of managing Nairit, Rhinoville violated the terms of the agreement several times. According to the agreement, the company was obligated to invest 60 million dollars in the development project of Nairit by January 1, 2009. In case of failure to fulfill this responsibility by the company, the government would be entitled to take over 100% of shares without returning the money. It did not happen because the government refused to take over the shares as the person in the government to coordinate the agreement was PM Tigran Sargsyan.
Whether PM Tigran Sargsyan says the media is slandering him for machinations connected with Nairit in vain, the reality is different and he bears responsibility for the giant chemical company whether it was a failure or purposeful machination.
What will happen to Nairit if the government refuses to pay off the debt of Nairit and sell it to RosNeft company? The only solution in such situation would be arbitration procedure over Nairit company to declare it bankrupt, which will be a total shame for the Armenian government. If we take out all people that allegedly committed violations, the main players on the top of this deal are the Prime-Minister of Armenia and the Russian state. This means that Russia will let Tigran Sargsyan down for 400 million dollars, which is not a good future for him.
By Gayane Khachatryan
