Love Offshore, Love a Mistress
Obviously our Government is linked to the topic of offshore with an inexplicable and deep love. So deep, that no any publication, no any uncovering affects activity of the Government, and isn’t becoming a lesson for them. It refers not only current Government, but the previous ones as well.
The society hasn’t digested the famous offshore scandal linked to former PM Tigran Sargsyan. And if it seemed, that Armenia’s authorities would attempt to maximally avoid the topic of offshore and dark mechanisms, just the contrary occurred in practice. Fresh example of it was recorded on Thursday. On the day’s session RA Government approved the investment program of “Dvin” hotel complex and change of former decision, defining the deadline for reconstruction of the hotel complex until 2019.
The Prime Minister assigned to agree on the investment program, conditioned that volume of anticipated investments for each year will be enshrined in the agreement. Also for grounding of investments for each year, the company should reflect it in IFRS (International Financial Reporting Standards), which should undergo external audit by Grand Thornton or any of the Big Four accounting firms, and the audit report was to be submitted to State Property Management Department adjunct to the RA Government. According to the Prime Minister, there are some issues connected to formulation of documents, which need to be discussed with the corresponding ministries.
For justice’ sake, it’s worth stating that the program is perfectly shaped (particularly against the background of “Dvin’s” dilapidated walls). Total of investments, pursuant the program, will comprise USD 120.6 million, a hotel complex, corresponding to international standards, will be constructed, 400 new workplaces will be created. Reconstruction of the hotel complex, according to the program, should be implemented in accordance with international standards of 5 star hotels. Its name will be changed as well—“Davit Bek” Hotel.
This is not all. According to the program, the hotel complex will have high-class restaurants, clubs, shops, a business center and center for conferences, SPA hall, a pool, fitness center, events halls and etc. The English say—the last but not least: a VIP casino in the territory of the hotel is planned as well, pursuant the obtained license. Surely, in case of investment more than USD 100 million, a casino may be built even in the Republic Square, then why not make use of the chance?
Other catching details may be found as well—separate “Apartments Plaza”, on the last floor of which a helicopter pad is planned as well. And for those, not having a helicopter, underground parking will be available, for about 380 cars.
However, the most “seductive” is the investing company. It’s registered in the offshore. Earlier Hetq.am reported that 100% shareholder of “Dvin” Hotel Complex CJSC—CCG Caucasian Communication Group Limited has been registered in Cyprus, in 2008. According to the register of Cyprus companies, it is equally shared by two other offshore companies- Berfarq Investments Limited (registered in Belize), and Jadis Services inc. (registered in the British Virgin Islands). Moreover, the newspaper revealed, that neither CCG Caucasian Communication Group Limited nor its shareholders don’t have any biography in any field. There is little information about these offshore companies.
CCG Caucasian Communication Group Limited from the very first day, besides change of the shareholder, didn’t conclude any deal. And after all this, on account of sad experience prior to this, we may do a bitter anticipation—“Dvin” hotel complex will hardly be reconstructed in near future.
The story of Demirchyan Sports and Concerts Complex is a proof to this. Yet in August 2015, the Complex was sold to an unknown “NTAA Investment Group” with 20 days of functioning by USD 30 million. Then it turned out, that its owner Armen Gevorgyan sold the company to Vahag Dino Avadisyan, whose name is being circulated in the USA for financial fraud. And 3 months ago, it turned out, that “NTAA Investment Group” didn’t pay USD 30 million and the Government cancelled the sales agreement. They say, property (tables, chairs, cupboards, mirrors, carpets and even water taps) of the Complex is being partially sold. Under unfavorable development of the state of affairs this doesn’t threaten to “Dvin” hotel, as…actually there is nothing there, but the walls.
Touching upon the offshore, it’s worth stating that last September RA Public Service Regulatory Commission allowed selling Electric Networks of Armenia CJSC to Liormand Holdings Limited CJSC, which was also an offshore company, registered in Cyprus. Further on, owner of Tashir Company Samvel Karapetyan explained, that technically it’s more appropriate to conclude the deal through an offshore company. Accordingly, this was not the only case, when offshore conundrum was very quickly puzzled out and there were no questions regarding who’s the real owner of the company.
In case of “Dvin” it’s difficult to say—when will it be clear or will it ever be? Judging from the activities of our Government, one may conclude, that they know who the real owners of offshore companies are. And like in the well-known humor, we should only ask, are they Armenians at least? And being Armenian in this case is really consoling, as means taken out of the country in an unknown and hidden way, at least partially, are returned to Armenia and invested in its economy. At least through “offshore” means. And the fact, that our officials are well-aware of the offshore, was once again proved, this time through dismissing of the head of Armenia’s Compulsory Enforcement Service.
By Babken Tunyan
