State Property Sold at a Significantly Lower Price, Prosecutor’s Office Indicates

The Republic of Armenia's Prosecutor General's Office continues its examination of the results of internal inspections conducted by state agencies as part of its function to protect state interests. This information is reported by the public relations department of the Prosecutor's Office.

Specifically, based on a letter and accompanying documents received from the State Property Management Committee of Armenia, an analysis conducted by the Prosecutor General's State Interests Protection Department revealed that officials of the State Property Management Committee, in violation of the requirements of the Law on Public Procurement, proposed to a private company to carry out asset valuations without adhering to the legally prescribed procurement procedures and without a formal contract.

As a result of this proposal, on August 24, 2016, the company carried out an appraisal of a property located at 66/1 Sasuntsi Davit Street in the Erebuni district of Yerevan, which has an area of 283.4 square meters and a land area of 721.6 square meters. Consequently, the property was evaluated at 26.6 million AMD.

Following this evaluation, the asset was sold to a private citizen for 28.1 million AMD. A subsequent analysis of the market value of the aforementioned property revealed that its market value could have been not 26,620,000 AMD, but rather 65 million AMD—approximately 2.5 times higher than the initially assessed value. It was also found that standards for the appraisal process were violated, as the intended use and size of the property were not taken into account.

Furthermore, according to a government decision dated June 13, 2003, the disposal of state property valued at over 50 million AMD is only permissible with a decision from the Armenian government. However, in this case, the property was sold in violation of government requirements, inadequately valued at less than 50 million AMD, and disposed of not by a government decision but rather by an order from the head of the State Property Management Department.

As a result, the property, which has a real value of 65 million AMD, was sold for approximately 2.5 times less than its value, causing a loss of about 36.9 million AMD to the state and leading to severe consequences. Following the examination results, a criminal case has been initiated under Articles 308, Part 2 and 325, Part 2 of the Criminal Code of Armenia, and the investigation has been assigned to the Investigative Committee of Armenia.