Where can I move my capital
On February 15 Prosperous Armenia held its congress. It was in a closed format but the speech of the leader of the party Gagik Tsarukyan was publicized through media.
Of course, the speech had certain criticism. Although the interested ones have already read the whole speech we still would like to advert to it in this article. “We know that during the recent period the best specialists are leaving the country. When the country is not able to keep these people in the country it means the government has serious omissions. In Armenia foreign investments have decreased by 40%.
It means the capital avoids our country and is moved to other countries and serves the boon of other nations,” mentioned Tsarukyan. Everything is right. Moreover, Tsarukyan has even presented everything in milder colors. He could have said that not only the foreign capital avoids investments but even the existing Armenian capital is diminishing. Gagik Tsarukayn himself invests a lot in different countries.
For example, according to media in 2009 Gagik Tsarukyan paid 25 million USD to buy the Bulgarian Gorna Banya mineral water factory. In Belarus he opened a brandy factory and in Riga Tsarukyan bought Riga hotel. According to media, he had paid 56 million Euros for the hotel. The director of Multi Group Sedrak Arustamyan reiterated that the hotel was bought but didn’t specify the price.
Let’s note that these are only the known deals. Many others are not known to the public. It means Tsarukyan’s capital is also going to other countries and helping the development of other countries. When speaking of the condition of the economy, competitive market, tax and customs administration and other issues of that nature, the PA leader seems to indirectly justify the situation. By the way, back in the day, one of the journalists asked the director of Multi Group Sedrak Arustamyan asked why Tsarukyan decided to invest all these funds in a foreign country and not Armenia.
“Haven’t we done many similar investments in Armenia? Let me tell you something else. If we open something new in Armenia people will start to complain that Tsarukyan is involved in a new business,” replied Arustamyan. Indeed, no one has the right to blame anybody. This is a business and as they say business has no fatherland. The most important thing is the interest and benefits. But when the foreign investor starts to politicize the economic situation it would perhaps be more honest to open the parentheses. For example, everyone is well aware that foreign investment is most appalled by the justice system of Armenia. They don’t feel protected here.
Regardless of to what extent the country progressed in international reports, regardless of how favorable the laws are on paper, nonetheless one failure or bad story may repel a big number of potential investors. There is a similar unsuccessful example from Multi Group. In 2009 Tsarukyan bought 100% shares of Kotayk beer from the French Castel. The German East Investor company, which has 3,2155% of shares in Ararat cognac, is still considered that it’s been cheated. In 2008 joint meeting in Ararat factory it was decided to consolidate 2363,5 pieces of the 8000 thousand dram documented shares. But as a result of consolidation no new shares have been attained by East Investor and their rights were cancelled without a further notice or compensation.
The company has applied to all the courts of Armenia but no results were achieved. Now they are planning to apply to the Human Rights Court of Europe. When speaking to our newspaper the director of the company Steghan Luxhauber told the reporter day by day a bigger number of foreign investors ask his advice to invest or not. But they refuse to do so after seeing that the German company was cheated and left without compensation. “I am aware how the Armenian business is connected with the political authorities,” said the German businessman. Nobody is saying that Luxhauber was 100% right. But this story has its own impact on potential foreign investments. Can you imagine what would happen if the European court satisfied the claim of the German businessman. It turns out that the foreign capital avoids Armenia because of Tsarukyan as well. By the way, the PA criticism is right with its content but they are not sincere especially when he speaks of business. For example, the same government that the PA slams kept valid the law on casinos, as a result of which the casinos nearby Yerevan will be shut down by granting monopoly to Tsarukyan in the gambling business. Back in the day they would say that there could be no opposition with a Bentley in Armenia. We can also add to this a monopolist opposition with a Bentley.
By Sargis Ghazaryan
