The Prosecutor’s Office of Erebuni and Nubarashen Administrative Districts of Yerevan City, within the scope of its authority to file lawsuits for the protection of state interests, examined the legal basis for the privatization of the state-owned share in “Gajegorts” CJSC and established that the privatization process had been carried out in violation of the procedure prescribed by law.

The examination established that, according to Government decision dated April 4, 1997, the privatization of the state-owned share in “Gajegorts” Closed Joint-Stock Company was authorized through a subscription for shares, with the company being reorganized into “Gajegorts” Open Joint-Stock Company.

Under the same decision, the company’s initial statutory capital was set at AMD 110 million, of which AMD 88 million 160 thousand was subject to subscription. A total of 8.816 shares, each with a nominal value of AMD 10.000, were subject to subscription. However, in practice, subscriptions were made for only 5.791 shares, for which a total of AMD 57 million 910 thousand was paid, while the statutory capital of the newly formed company amounted to AMD 62 million 930 thousand.

On August 7, 1997, a privatization agreement was concluded between the Department for Registration and Privatization of State Property and “Gajegorts” OJSC. Under the agreement, the sale price of the enterprise was set at AMD 88 million 160 thousand; however, the enterprise was sold for AMD 57 million 910 thousand.

The Prosecutor’s Office’s examination established that the Government’s April 4, 1997 decision did not prescribe any procedure for reducing the state-owned share in the company’s statutory capital, nor was a new Government decision adopted regarding the reduction of that share.

As a result, without the relevant legal basis prescribed by law, the state-owned share in the company was reduced to AMD 62 million 930 thousand. Consequently, the price of the package of shares to be transferred to the buyer was effectively reduced, and the enterprise was sold for AMD 57 million 910 thousand instead of the stipulated AMD 88 million 160 thousand.

On August 7, 2026, the Prosecutor’s Office of the Erebuni and Nubarashen Administrative Districts of Yerevan City submitted a report of a suspected crime to the Anti-Corruption Committee in order to recognize the agreement of privatization of August 7, 1997 invalid and return 8816 shares to the Republic of Armenia.

On August 27, 2026, the statement of claim was admitted for consideration by the Anti-Corruption Court, and the Prosecutor’s Office’s motion to undertake measures to secure the claim was granted.