The Department of State Interests Protection of the Central Military Prosecutor’s Office examined the process of alienation of the 100% share in the state-owned “ARKROS” LLC.

The examination established that in 2003, the 100% share in “ARKROS” LLC became the property of the Republic of Armenia, represented by the Ministry of Defence (the “MEGAMALL” shopping centre is currently located on the premises of the market).

The state-owned “ARKROS” LLC held a 100% share in “Yerevan Market No. 7” LLC, which had been acquired by the company in 1999 for AMD 282,452,000.

The examination also established that, based on a report submitted by the Minister of Defence of the Republic of Armenia and without conducting a valuation in accordance with the prescribed procedure, by Government Decision No. 889-A of 10 June 2004, the alienation of the 100% share in the state-owned “ARKROS” LLC to a private individual through direct sale was authorised, with the sale price set at AMD 160,562,730, equivalent to USD 303,000. Meanwhile, approximately seven months before the adoption of the decision, within the framework of enforcement proceedings, the 100% share in the company had been valued at AMD 306,346,630, a fact that had also been known during the consideration of the draft decision. Moreover, the Minister of Finance and Economy of the Republic of Armenia had proposed alienating the share through an auction rather than by direct sale, but that proposal was not accepted.

Despite the above, on 14 July 2004, the 100% share in “ARKROS” LLC was alienated for USD 303,000 (AMD 145,783,900 below its appraised value).

Having identified apparent elements of a criminal offence in the course of exercising his powers to protect state interests, the prosecutor submitted a report of a crime to the Anti-Corruption Committee, and criminal proceedings were initiated.

The Military Prosecutor’s Office filed a claim for the protection of state interests with the competent court, which was admitted for proceedings.