Minimum General Price Set, Property Belonging to Public Radio Sold; Criminal Case Initiated

The Office of the Chief Prosecutor of Armenia has announced that in the framework of the lawsuit for the protection of state interests, the building at 2 Teryan Street in Yerevan, belonging to the "Armenian Public Radio Company" LLC, and the process of alienating the land necessary for its use and maintenance has been investigated.

To this end, relevant documents were requested and obtained from the State Property Management Committee of the RA Ministry of Economic Development and Investments, the State Committee for Real Estate Cadastre, and the "Armenian Public Radio Company" LLC. The investigation revealed that by the decision of the RA Government dated October 23, 2016, the building located at 2 Teryan Street in Yerevan, and the land necessary for its use and maintenance, were returned from the "National Cinema Center of Armenia" to the subordination of the State Property Management Department of the RA Government and invested in the charter capital of the "Armenian Public Radio Company" LLC at the appraised value. Moreover, the transfer of the mentioned state-owned area to the "Armenian Public Radio Company" LLC under gratuitous ownership was justified by the need for additional spaces to ensure the activities of the Public Radio Company back on August 27, 2015, upon a request from the chairman of the Council of Public Television and Radio of Armenia to the head of the State Property Management Department of the RA Government.

Later, however, by a decision dated March 30, 2016, the RA Public Television and Radio Council granted permission to the "Armenian Public Radio Company" LLC to auction the 1,167.9 sq. m building and 0.10014 ha land located at the specified address using the classical auction method, setting the starting price for the first nine auctions at 720,000,000 AMD. It was stipulated in this decision that if the property was not sold, starting from the tenth auction new auctions should be organized, reducing the starting price of each subsequent auction by 4% from the total starting price of the previous auction, setting a minimum overall price of 480,000,000 AMD. To organize the auction sale, a contract was signed on March 31, 2016, between the Company, the auction house LLC, and the commodity exchange LLC. However, the investigation revealed that the RA Public Television and Radio Council, by another decision dated December 5, 2016, changed the initial auction conditions, allowing the starting price of the property to be set at 650,000,000 AMD, and if it was not sold, new auctions were to be organized, with each subsequent auction's total starting price set at 35,000,000 AMD less than the total starting price of the previous auction, setting a minimum overall price of 300,000,000 AMD. It was found that public notifications regarding the auction were made in violation of the mandatory conditions set forth by the law on public auctions.

As a result, the essence of public auctions was disrupted, and the participation of individuals meeting the legal conditions in the contract signing process was excluded. It was also discovered that at the request of the "Armenian Public Radio Company" LLC, the value of the property was reduced by 35,000,000 AMD each day, resulting in the state-owned property being sold as a stock item for 300,000,000 AMD. Notably, the value of the property was reduced by 350,000,000 AMD only in December. However, according to Article 5 of the Law on Commodity Exchanges of Armenia, "Real estate, intellectual property objects, copyright, artistic works, and those goods whose circulation (sale) is prohibited by the legislation of the Republic of Armenia cannot be commodity stock items."

Ultimately, by abusing their regulatory or other powers against the interests of the organization, employees of the "Armenian Public Radio Company" LLC sold real estate, which is not considered a stock commodity, through a commodity exchange LLC, ignoring the provisions of the law on public auctions. This led to severe consequences, as the organizers of the auction violated the public auction conduct regulations, causing damages of at least 350,000,000 AMD to the "Armenian Public Radio Company" LLC. Considering that the evidence revealed through the investigations apparently contains features of a crime, a criminal case has been initiated regarding the misuse of authoritative or other powers by employees of the "Armenian Public Radio Company" LLC against the interests of the organization and the violation of public auction conduct regulations, under Part 2 of Article 214 and Article 196 of the RA Criminal Code.

The investigation of the criminal case has been assigned to the Investigation Committee of the RA.

Notice: The person suspected or accused of the alleged crime is presumed innocent until proven guilty in accordance with the procedures established by the Criminal Procedure Code of the Republic of Armenia by a legally binding court verdict.