Gagik Tsarukyan's New Businesses: Fact-Checking Platform

The Fact-Checking Platform (author: Mkrtich Karapetyan) has published an article regarding Gagik Tsarukyan's new businesses.

“Until the discussions in April-May of this year about the illegal entrepreneurial activities of Gagik Tsarukyan, the leader of the Prosperous Armenia party, and the grounds for stripping him of his parliamentary mandate, during the same period, the leader of the BHK has established new companies in which he acts as a shareholder.

‘Tsarukyan Cotton Road’: New company with an old cotton producer
On April 11 of this year, ‘Tsarukyan Cotton Road’ LLC was established. Gagik Tsarukyan owns 70% of the company’s shares, while 20% belongs to Gagik Khachikyan, 5% to Syrian businessman Ammar Sabbagh, and 5% to French citizen Fauzi Akfaliyne. The company has established cotton fields on the banks of the Araks River and also intends to organize exports and create a knitting production. The activities of the company are regularly presented through Tsarukyan-owned ‘Kentron’ television. For instance, a report aired on May 17 repeatedly stated that foreign investors would not invest if it weren’t for Tsarukyan’s presence.

Khachikyan, Tsarukyan's partner, is not new to the field of cotton production and has previously been embroiled in several controversial incidents. CivilNet has reported that last year, Khachikyan established ‘Uzbek Textile Group,’ invited Tajiks for work, some of whom he later refused to pay. The Tajiks held protests, and following the uproar, they were paid and left Armenia. CivilNet also wrote that Khachikyan is the owner of a textile factory in Tsovazhard, which has failed to meet significant debt obligations. Notably, Khachikyan has been found guilty twice for document forgery and illegally crossing borders, and he has paid fines for the same offense.

Official notices from the public notifications website inform us that the newly established company has already accumulated tax debts. The State Revenue Committee notified ‘Tsarukyan Cotton Road’ on June 24 about unpaid tax obligations exceeding 4.8 million drams.

Tsarukyan's New Companies
On June 4, Gagik Tsarukyan founded two new companies: ‘Multi Trax’ and ‘Multi Propan Gas.’ Tsarukyan is the sole shareholder of the former, while the director is Sedrak Arustamyan, director of Tsarukyan’s ‘Multi Group.’ The office is located in the building of the ‘Ararat’ wine-brandy-vodka factory owned by Tsarukyan. It is not possible to determine what activities ‘Multi Trax’ is engaged in through the taxpayer search system.

Similarly, it is unclear what activities are being undertaken by Tsarukyan's other company, ‘Multi Propan Gas.’ Tsarukyan owns 50% of this company, while the other 50% belongs to Ukrainian citizen Hovhannes Hovsepyan, who is the president of the National Boxing Federation of Armenia. This organization was created to counterbalance the Armenian Boxing Federation, led by Arthur Gevorgyan, the son-in-law of former police chief Vladimir Gasparyan.

On June 17, the BHK leader established another company, ‘Multi Trade House,’ in which Tsarukyan holds 70% of the shares. The remaining 30% belongs to Dmitri Sarkisyan, a resident of Stepanakert. On July 15, ‘Gold Silver Chain Company’ was also established. Information about this company is absent from the taxpayer search system. The shares are divided equally, with an offshore registered ‘Vardi Invest LTD’ from Cyprus as a shareholder alongside Tsarukyan.

Is Tsarukyan Violating the Constitution?
Article 95 of the Constitution explicitly prohibits a Member of Parliament from engaging in entrepreneurial activities. Moreover, according to the Law on Public Service and the Civil Code, the term ‘entrepreneurial activity’ notionally includes the registration of profit-seeking legal entities.

According to the Law on Guarantees of Activities of Members of the National Assembly, a Member of Parliament is obliged to withdraw from state registration as an individual entrepreneur and sever their position in a commercial organization within one month after obtaining their mandate. In other words, the case of transferring business for fiduciary management relates only to businesses that a parliamentarian may have owned before being elected (when they had the right to do so), while after being elected, they are not permitted to create businesses, and thus the law does not even provide for any other mechanism for fiduciary management of businesses created during the mandate.

Accordingly, Tsarukyan's creation of new companies directly contradicts constitutional requirements.

Alongside this business activity, Gagik Tsarukyan has displayed passivity in his parliamentary work. According to the Parliament Monitoring website, Tsarukyan has not initiated any legislative measures in the 7th convocation parliament. He has been absent for 82 out of 191 votes. The law stipulates that a Member of Parliament's duties take precedence over any other work activities they may undertake. Despite not submitting any legislative initiatives, he appears unconstrained in his business pursuits.

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