Police to give up on Nairit: criminal case refused

One of the ‘good sides’ of the incumbent regime in Armenia is its predictability. Two months ago 168 Hours wrote that according to reliable sources of information, the Central Investigation Department of the RA Police had been confidentially ordered to cancel the investigation case against Nairit company. In answer to our recent letter to the Police PR department we received a letter writing that the Central Investigation Department had refused launching a case against Nairit Factory JSC, according to Article 35/1-2 of the RA Criminal Code. This means that the police did not find criminal evidence in the case. However, it is clear that there are more than one proofs of criminal evidence in the case. To note, the financial controller commission of the RA Finance Ministry submitted results of check-up at Nairit company to the general prosecutor’s office in December 2011, however the department of state interests protection of the General Prosecutor’s office forwarded the case to the Police department for fighting organized crime only on March 27, 2013, after a publication in Hetq online media, who forwarded the case to the general investigation department in two months. The subject of the criminal case had two components according to two penalty tickets issued by the finance ministry. One of the tickets concerns the lost court case of 4,9 million dram by Iranian Numard Trading company, and the second one concerns 10 million dollar credit borrowed from the Intergovernmental Bank by Vahan Melkonyan, director of Nairit in 2009, to purchase Megatex company.

Criminal Evidence 1: Evidently falsified document ignored by Police.

In 2009, Numard Trading company sued Nairit company requiring compensation of 5 billion drams against failure to fulfill its responsibilities (882 million drams and interest rates). The factory’s lawyers lost the court case as a result of submitting falsified document to the court to show that the term of the agreement had not finished (signed for three years in 2002, according to which caoutchouc delivery had to be provided before August 2003). However, by January 1, 2006, the debt to the Iranian company was not registered at Nairit. Even the finance ministry admitted that the document had been falsified as its number started with A, which meant that the document had been registered with an older date. In 2005-2007 Karen Israyelyan, the director of the factory at that time, gave evidence on this to the prosecutor’s office.

Criminal Evidence 2: Nairit’s interests were not protected in court on purpose.

There was a provision in the agreement with the Iranian company in 2002 stating that the Iranian company was to write what kind of caoutchouc they would want and how much, and organic delivery from the Armenian factory with their trucks. However, the Iranian company has neither sent an order, nor trucks to organize the delivery. In ignorance of this violation of the agreement, the company’s lawyer referred to the term of the agreement, even though it could not be applicable in that case (they had falsified a document to refer to it).

Criminal Evidence 3: Two judges have made different contradicting decisions relating to the same case.

The Iranian company’s claim has been processed b the first instance court of Armenia twice, each time by a different judge. In the first case, Shengavit community first instance court judge Ara Kubanyan satisfied the claim by obligating Nairit to pay approximately 5 million drams, however no decision was made on the falsified document. Further on, the upper instance court (Nairit applied to the upper instance court) the case was sent back to the first instance court, where judge Ishkhan Barseghyan refused the claim by referring to the passed term of the claim. This court ruling annulled Nairit’s debt in ignorance of the agreement with the other company. Meanwhile, the court made a decision to confiscate 147 million drams from Numard Trading company to be paid to the RA state budget as state duty, which has not been confiscated so far (we will write about this issue in a separate report). It is nonsense that the court accepted a case from a foreign company registered in offshore zone and imposed confiscation penalty later on.

Shouldn’t the finance minister have found out the violation, the debt would be charged from Nairit and would be embezzled. Notwithstanding evidences above, investigators claim they do not see any violation in the case, and the ministry of finance ignores it. Such explanation of “lack of criminal evidence” could be brought for the trade deal of Megatex company as the documentation seems to be fine with it and the problem is more or less at moral level. To note, Vahan Melkonyan, former director and incumbent head of the board of directors of Nairit, borrowed 10 million dollars to buy Megatex company, his own property, for the purpose of using as storage for Nairit. At that time the annual production volume of the company was 8,000 tons. This deal is controversial, too, as during the Soviet time the factory’s storage could handle up to 50,000 tons annual production volume.

Investigators could find out the reasons why deputy minister of energy and natural resources Ara Simonyan, being the ministry’s representative in the company’s board of directors, gave his consent to Nairit to borrow that much money to buy that property and resell it in four months at a price of 900,000, which is ten times less than the amount paid for it four months before. The company’s debt of 10 million dollars has to be paid by the public budget now. Hetq’s findings point out the fact that the minister of energy and natural resources, Armen Movsisyan, and Prime-Minister Tigran Sargsyan re connected with this story. Investigators cannot interfere. However, this is a big piece of bone to be eaten easily. It is not excluded that Russian may help to discover this fraud. On August 23 the Arbitration Court of Moscow looked into the claim of the Intergovernmental Bank against Rhinoville Property Limited. The next session of the court will take place on October 15 (the first session was postponed till the end of October). According tour sources from the Intergovernmental Bank, the case is under the Russian central Bank’s control now. The Intergovernmental Bank has been assured that the amount given to Nairit would be guaranteed to be returned by the Armenian government. To note, a borrowing of 200 million dollars was issued to Nairit by the Intergovernmental Bank, and the transaction was guaranteed and secured by the Armenian government.

By Gayane Khachatryan